Follow These Foolproof Strategies in First-Time Homebuying
You are planning to buy your first home, but you may be wondering if you are making the right choice. Purchasing a house can seem like an overwhelming endeavor, but that does not mean that you cannot succeed at it if you arm yourself with the right strategies. Keep reading to learn more.
Undergo an Actual Pre-Approval
You might think that you get pre-approved by your mortgage lender when you first meet with them, but that isn't the case. A pre-approval is a specific term that is different from a prequalification.
When pre-approved, you are given a specific number based on your financial situation. You can then go out and follow your dream of buying a home.
However, if you purchase a home without being pre-approved, you could be in for some issues. For example, if you are pre-approved for 500 thousand dollars and buy a 600-thousand home, you could run into some problems with the bank.
Maintain a Down Payment
One of the most overlooked aspects of buying a home is how important a down payment is. You typically need to have at least 5 to 10 percent of the house's total price to close the deal. If you don't, you will have to put an additional amount down to pay for it.
The good thing about this, though, is that you likely won't have to pay any interest on your down payment in most cases. As long as you make a down payment of at least 5 percent, you can save money by putting down a larger down payment.
Apply for Home Loans
When you buy a home, you have access to many different home loans. You will likely have a choice between two or three other mortgages, depending on what the market offers at the time.
Most people use traditional mortgages, where you'll have 20 percent of the house price to put down on a home. If you have over 20% you do not pay mortgage default insurance which is usually $15,000-$22,000 throughout the lifetime of your mortgage. Under 20% means you must pay a portion of this fee every month for 25 years.
On the other hand, an open mortgage allows you to pay off part of the debt or pay it back in full without worrying about any penalties. Interest rates on an open mortgage are typically comparable to those on a conventional mortgage.
Get Prequalified before Shopping for Homes
If you don't take the time to get prequalified before you start shopping for homes, you could be in for some issues. You can get into your home without any problems. This is another example of why being prequalified is so essential.
THE BOTTOM LINE
As you can see, buying a home is much more than getting a loan. You need to know that you are doing everything right when purchasing a property to give yourself the best chance at success.
If you follow the strategies listed above, you should have no problems purchasing your first home. However, if you have any questions or concerns, you should feel free to share them with a real estate specialist who can assist you along the way.
Do you want to learn more about mortgage financing in Canada? Level Up Mortgages supports homebuyers and homeowners in attaining success in their mortgage journey with mortgage strategy, digital mortgage education, and introductions to all the other experts you need to succeed in homebuying and personal finance. To assist homebuyers and homeowners in purchasing or refinancing new homes, we work with premier banks and best-rate mortgage lenders in British Columbia and Ontario. Get in touch with us today!
See what you qualify for or contact Paul to get your pre-approval.
Paul Davidescu (www.levelupmortgages.com)
604-809-3188
paul(at)levelupmortgages.com
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