5 Tips to Consider as a First-Time Homebuyer in Canada
For many, buying a home for the first time can be just as exciting as it is exhausting.
It’s exciting because you're taking a leap in the right direction in terms of building equity and security. It's scary because it's a huge financial decision that can be very risky if you're not careful.
Rushing into buying a home too quickly can be a mistake. It's important to really think through what you're doing and to make sure that you are prepared.
You’re going to be an independent adult, with all the burdens and freedoms that come with that. What do you need to know before moving into the home of your dreams? What can you expect when you’re buying a home? And what should you be aware of right out of the gate? Here are some important considerations for buying your first home in Canada.
Know What You Can Afford and Make a Budget
The first step to buying a home is knowing what your budget will allow. If you’re moving out of your parent's place, you might have some room to work with, but for most people, this is the first time you’re buying a home on your own. You’re going to have to make room for all the expenses that come with living on your own, such as utilities, appliances, furniture, and more.
Save in Advance for the Down Payment
To buy a home in Canada, you'll need a down payment, which is the amount of money you'll need to provide for the down payment itself. This is usually 5-20 percent of the purchase price of the home. For example, if you’re buying a home for $400,000, you will need to make a down payment of $20,000.
Leverage the First-Time Home Buyer Incentive
As an aspiring homeowner, you’re eligible for the First-Time Home Buyer Incentive, which makes it so that you won’t need to save up as much for your down payment. You can use this incentive to purchase a home and get between five to ten percent off the home's purchase price, allowing you to allocate it to your down payment instead.
Check Your Credit Report Before Applying for a Mortgage
Before you apply for a mortgage, you want to make sure your credit report is in good standing. You’re going to want to make sure that your credit report is good enough to qualify for a mortgage with a low-interest rate.
Explore Your Options by Shopping Around for Different Mortgages
Once you know how much you can afford, shop around for different mortgages from different lenders. This will help you secure the best mortgage for you, as well as the one with the most affordable monthly payments.
THE BOTTOM LINE
The Importance of Preparing and Doing Your Research Before Taking the Plunge as a First-Time Homebuyer
While buying a home is exciting, it’s also one of the biggest financial decisions you’ll ever make. Before you go whole-hog into buying a home, it’s a good idea to plan ahead and make sure you’re prepared for every step of the way.
If you're looking for mortgage strategies in Canada, you've come to the right place. Our team at Level Up Mortgage streamlines the whole mortgage process for new homebuyers, newcomers, and self-employed individuals. Learn more about how we can help you today!