1. Prepare Your Finances
- Get your finances in order before cruising the real estate listings
This process will help you estimate how much you can afford to buy, as well as organize critical documents required to support a mortgage application.
- Check Your Credit Score
A credit score is a rating used by lenders to assess the amount of risk they face in extending credit to you.
In general, the lower your score, the less likely you are to be approved for a loan.
Checking your credit rating allows you to see where you fall on the scale and figure out how to improve your credit score before submitting a mortgage application.
If your score is lower than you’d like, there are actions you can take.
2. Secure A Downpayment
Before you start shopping for real estate, your first step is to save up money for a down payment.
A “down payment” is the amount of money that you put towards the purchase of a home. In general, the larger your down payment, the easier it is to obtain a mortgage.
How can you save for a down payment?
Start by opening a high-interest savings account and setting up an automated savings plan.
As you start saving, you might ask: how much do I need to save for a down payment?
The minimum amount depends on the home’s purchase price. In Canada, people typically spend between 5% and 20% of the purchase price on a down payment. So start saving now!
3. Find The Right Location
The last thing you want is to be stuck with a rental property in an area that is declining rather than stable or picking up steam.
A city or locale where the population is growing and a revitalization plan is underway represents a potential investment opportunity.
When choosing a profitable rental property, look for a location with low property taxes, a decent school district, and plenty of amenities, such as parks, malls, restaurants, and movie theaters.
In addition, a neighborhood with low crime rates, access to public transportation, and a growing job market may mean a larger pool of potential renters.
4. Finding The Best Mortgage Rate Before Buying Your Home
Since interest rates are constantly fluctuating, it’s important to shop around and find the most competitive mortgage rates. The process can be time-consuming, so we recommend using a specialist who can provide you with the most competitive rates. He will guide you through all the steps to get you the best mortgage for your needs. Even after you’ve secured a deal, you can still get help by sending your questions to an advisor.
5. Start House-Hunting!
You’ve got some money in the bank and a pre-approval in your hands. This is the exciting part of the home buying process – when you can start house-hunting.
If you aren’t sure whether a home you’re interested in is fairly priced or not, consider looking for valuable insight into recent sales data for their ideal neighborhood.
In conclusion, buying a first home can be a daunting experience for anyone. Long before the fun part—the actual search for your home—you have to figure out your finances, identify and exploit saving opportunities, get pre-approved for a mortgage, and hire your consulting firm, lawyer, and other professionals.
It might seem overwhelming, but for many millennials, it’s worth it to become a homeowner. If that’s you, this guide will help you get one step closer to having the keys to your new home in hand. Good luck!