So, you’ve considered the advantages and disadvantages of both renting and buying a home and have decided that home-ownership is best for you. Congratulations! Once you’ve saved up enough money for the deposit, down payment, and any closing costs, you’re ready to buy your home.
Buying a home can feel complicated, overwhelming, or even downright scary, especially for first-time homebuyers. But it doesn’t have to be! Follow these 10 steps, and you'll be cruising your way to homeownership.
Step 1: Review your credit score and credit report. This will help prepare you and keep you organized throughout the home buying process because, trust us, you don’t want any unpleasant surprises when it comes time to apply for your mortgage.
Step 2: Get a mortgage pre-approval. If you’re a first-time homebuyer, you should familiarize yourself with mortgage terminology, like fixed-rate mortgage vs variable rate mortgage, so that you can be well-informed in your decision.
Step 3: Determine how much you can afford for a home. It is important to take the time to figure out how much house you are able to afford. Some main factors to consider are your income, the cost of the down payment, debt, and credit score.
Step 4: Figure out what kind of house you’d like to live in. Again, buying a house can be overwhelming, so make it easier on yourself by narrowing down the type of neighbourhood and property type you’re interested in. Do you want to live in a detached home, townhouse, or condo? Would you prefer to buy a new home or a resale home? Make sure you consider all of the pros and cons for each option so you can find the right place for you.
Step 5: Start shopping! Buying a home can also be full of excitement and anticipation. Make your goal set on finding your perfect dream home, but at a price you can afford.
Step 6: Make an offer. Once you find the perfect home for you, make an offer to purchase it. Consider laying out some conditions in order to protect yourself.
Step 7: Get a home inspection. Home inspections are to ensure that the home you’re looking at is in good shape. While a home is typically a good long-term investment, you can’t know for sure until you've had it inspected by a licensed home inspector.
Step 8: Get an appraisal. Your lender should arrange for an appraisal to be done on your property. This is usually done after the mortgage has been approved. Select the appropriate type of mortgage and sign the mortgage commitment package.
Step 9: Decide on home insurance. Lenders usually require you to receive home insurance by the closing date (or else you risk your mortgage not getting approved).
Step 10: Sign the paperwork to finalize the sale. Voila- you bought a home!