Hard to believe how time flies, but it’s been almost 2 years since my wife and I moved into our home in a community south of Ottawa. This home was our third place together, after living in a semi-detached home in the ‘burbs for a couple of years following downtown condo living at the beginning of 2005. Seven years later, three homes later, there is lots to reflect on regarding what we did right and what we could have done better with these home purchases. Those thoughts could fill a few dozen posts however if you’re a first time home buyer, there are definitely some tips I want to pass your way. Here are my reflections of a first time home buyer.
Get pre-approved before you shop
When you’re pre-qualified for a mortgage, you simply have a good idea what you can (and cannot) afford. You’ll save time and emotional energy, only looking for places you can afford instead of trying to live out some unrealistic financial dream. You’ll be able to forecast how much your monthly payments will be based on how much your down payment could be. Your pre-approved status will give you more negotiating power and allow you to pass one of the standard conditions almost every home purchase requires. Finally, another great benefit of a pre-approved mortgage? You’re under no cost to accept the pre-approved mortgage from the lender. Getting pre-approved for a mortgage seven years ago started our house hunting journey on the right path.
Stay calm and stay patient
Buying a home, especially your first home, can be an emotionally draining process. Why? This is likely going to be the biggest investment you’re ever going to make. Instead of letting that thought scare you to death, try hard to stay calm and patient through the shopping process. This is because the constant rollercoaster of highs and lows that come with home buying can really put a strain on you and your significant other. There will be long days and likely sleepless nights because you’re looking online at the latest market offerings. To help you out, consider obtaining the services of a real estate agent who will forward to you new listings based on your home purchase criteria. Stay patient by allowing the search process to settle in for a few days or weeks, maybe even months. Avoid making any snap purchase decisions and trust your gut, stick to your home purchase criteria as much as you can. If it doesn’t feel right, it probably isn’t.
Before you call it home, keep shopping, for the best mortgage rate
One could say it’s a privilege to be loaned huge sums money to buy a house but big loans are very big liabilities. This is why although you’re pre-approved for a mortgage and you’ve be patient enough to find your first great place, make sure you’re getting a solid mortgage package before you seal the deal. Making sure you understand the rules of the game, getting the terms and conditions that suit your needs, could save you thousands of dollars or more in the home ownership years that follow. Reports by the Canadian Association of Accredited Mortgage Professionals have stated that about 65% of all mortgages are taken over a 5-year term, but it doesn’t mean this duration is right for you. Fixed or variable rate and mortgage prepayment options are just a few things you’ll need to make decisions about when it comes to your mortgage. In the end, shopping around for Canadian mortgage rates and conditions that fit your needs, just like your home should, will give you peace of mind and save you money in the long run.
There are a host of other lessons learned from my days as a first time home buyer but I hope these ones for any would-be home buyers out there steer you in the right direction.
What are your reflections of a first-time home buyer? Are you hunting for your first home right now?