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Whether you’re entering the market for the first time or simply moving on from your current place, there’s a lot that goes into buying a home.
To make things easier, we’ve put together a handy homebuying checklist to help you prepare for entering the market.
If you’re looking to buy a home in the near future, here are a few things you can do in advance to make the process smoother.
Determine Your Budget
Before you begin your home buying journey you’ll need to know what you can reasonably afford. Not factoring in your downpayment, determining your home budget will primarily revolve around mortgage costs. Once you have a rough estimate of how much you’ll be able to contribute to a mortgage on a monthly basis, you can work backwards to set a rough price range.
Need help build your budget? Use our handy Home Buying Calculator.
Don’t forget that budgeting for a home also includes leaving space for additional costs beyond the home itself. As the buyer, you’ll be responsible for covering a handful of transaction-related items such as the home inspection, legal fees and land transfer taxes. Depending on your financial health, you may also require mortgage insurance.
Ready Your Down Payment
Like most buyers, there’s a good chance you won’t be paying for your home all at once. Rather, you’ll need to make a sizeable down payment and pay off the remaining balance through your mortgage. In the past, a standard down payment in Canada was approximately 20% of the home’s sale price. However, as a result of inflation and other economic factors, that’s no longer the case today.
In 2022, the Canadian minimum for a downpayment is 5%. That being said, you’re able to make as large of a down payment as you wish. The more you can contribute up front, the lower your monthly mortgage costs will be.
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Before you begin looking at listings, it’s important to have an understanding of how mortgages work and which type of mortgage is right for you. Mortgages are not one-size-fits-all and you’ll need to navigate the various options available before buying a home.
The first step is finding a lender. You can work with your existing bank or an independent mortgage broker. Next, you’ll need to determine which type of mortgage will work best for you. This typically boils down to choosing between a fixed or variable interest rate. If you’re unsure about which direction makes the most sense for you, ask an expert. Your financial planner, bank and even real estate agent can offer advice based on your unique circumstances.
Once you’ve found the mortgage that works for you, you’ll want to get pre-approved before heading to the market. A pre-approval means that your bank or lender has agreed (with conditions) to provide you with financing for your home purchase.
Pre-approvals are typically easy to get and they don’t cost anything. Plus, once you’ve found your dream home, a mortgage pre-approval offers you a leg up during the offers and negotiations phase.
Looking to buy a home in the Bay of Quinte Region? Our market is unlike any other in Ontario. Check out these blog posts to learn more.
- Thinking About Buying Waterfront Property? Read This First
- 5 Things to Know Before Moving to Belleville
Find A Real Estate Agent
Finally, you’ll want to find a great real estate agent who can support you throughout the buying process. Like mortgages, you’ll need to do some research in order to find the right agent for you.
Working with a well-connected, local real estate agent can offer you a significant advantage during the buying process. Not only will they have an expansive knowledge of the local market, but they may also have industry connections that offer you access to off-market or private home listings. Your agent can also connect you with trusted real estate lawyers to help you navigate the various paperwork and legalities of buying.
Hiring an agent is also essential if you choose to buy a pre-construction home or condo. As your primary advocate during the sales process, they’ll ensure you receive the best possible pricing for your home and offer any insights about the developer or surrounding area that may impact your enjoyment of the home.
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