5 Things You’ll Wish You Knew Before Buying Your First Home
I know that the home buying process is daunting, and it might seem like you have a million tasks on your plate. Everyone is giving you advice, but what should you really spend your time worrying about? I asked a recent first-time homebuyer what she wishes she knew before she bought her home. Here are the 5 pieces of advice she thought were worth sharing.
Take Your Time With Mortgage Lenders
It’s no easy decision when debating over the many home lender options. First-time home buyers typically do the research themselves or use a loan officer, often referred by their real estate agent. Whichever route you decide works best for you, don’t be too hasty. Reading the fine print of every offer you receive is a must.
If you take the time to consider various lenders, you may find yourself in a position to negotiate the terms of your mortgage. A major first-time buyer consideration is that of CMHC Insurance (PMI). If your down payment is less than 20% of the home sale price, then you will be required by most lenders to pay a one-time fee. By taking the time to shop around, you may have the opportunity to arrange a more favorable long-term agreement.
Pro tip: you can quickly compare different rates and lenders using my mortgage broker.
Everyone’s situation is unique. There are pros and cons to every loan. I am not a financial advisor and you should always supplement our advice with a professional.
I work with one of the top mortgage brokers in Ontario and would be happy to put you contact with Jennine who can walk you through the process and determine what is in your best mortgage interest. Email at [email protected]
Budget For Unexpected Costs
This may sound obvious, but plenty of first-time buyers do not fully comprehend the amount of money that is spent before getting the keys to their future homes. While it’s essential to determine your future mortgage allowances, it is equally imperative to save an emergency fund. If your current living situation does not allow a month to month lease agreement or you find the home you can’t live without prior to your planned moving timeline, you will need a financial buffer. More often than not, buyers find themselves stuck between their current living expenses and those of their new mortgage agreement. Moving costs and the possible use of a storage facility can become very costly even over a relatively short period. Buyers will also be responsible for paying all inspection fees for each home they intend to make an offer on. For direction on how much to set aside for these extra costs, speak with an experienced local real estate agent. HINT: Me.
There Is No Such Thing As The “Perfect Home”
According to real estate mogul Barbara Corcoran, “Buyers decide in the first eight seconds of seeing a home if they’re interested in buying it.” While following your gut is important, too often new buyers tend to make rash judgments. Before starting your home search, brainstorm a very detailed list of deal breakers. Is having a large yard a must? Are you only interested in homes with updated interior features? Do you require a minimum of 3 bedrooms and 2 bathrooms? Now narrow that list of must-haves down to the most important 3-4 features. This may take some serious flexibility. If you have the time and freedom to look at every available option, do it. I know this sounds daunting, but your earlier expectations may change during the house hunt. Sometimes it’s tough to find the home that has everything you ever dreamed of -- in the ideal price point -- in the perfect area of town.
It might be impossible to find a home that checks off all of the boxes upfront. But as time goes on, you can check the rest of the boxes off. I have a helpful homebuyers handbook with worksheets to assist you in this process. Click here to download your copy.
Always Consider Return On Investment
It’s relatively easy to factor which type of home and location suits your current lifestyle needs. A townhouse or an apartment may offer a cheaper mortgage upfront… it might even be within walking distance to your favorite coffee shop or gym! While these are all things to consider, do not lose sight of the long-term investment. If and when you decide to rent or sell your first home, it is extremely valuable to consider your future buyer. One key factor to consider is the area’s school district. Would your home be attractive to a family? If the answer is yes, there is a good chance you’ll have a more successful selling experience when the time comes.
Pay Close Attention To The Home Inspection
Once you’ve chosen the home you want to make an offer on, and the seller has agreed to terms, you will need to hire a licensed home inspector (or sometimes multiple home inspectors) to evaluate the home's condition. Keep this in mind: no home, no matter the age, is in perfect condition.
A good inspector will point out all the issues about the four main inspection points: HVAC, electrical wiring/panels, plumbing, and roofing. These four areas of concern will directly affect your home insurance coverage and more costly short and long-term repairs. The status of the inspection report will also play a role in the negotiation process between the buyer and seller. An experienced realtor will know exactly how to advise your next steps.
While not every scenario is highlighted here I am happy to answer any questions you have during your home buying experience. I even have a well-rounded list of home inspectors if you are in need of a referral.
Buying a home or condominium should be a stress-free experience and choosing the right Realtor to work with will make that process a successful experience. Call me today to set up your appointment to interview me and learn how I specifically work with homebuyers.
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