A Guide for First Time Home Buyers

Congratulations You’ve Decided to Buy Your First Home – Now What?

Deciding to buy a home is an exciting time in anyone’s life, but even more exciting for a first time home buyer. After all, achieving the dream of home ownership is a sure sign that you have made it as a successful adult. At the same time, the process of purchasing a home can be a bit overwhelming if you have never bought a home before. Fortunately, the process is far less confusing and complicated than you might think. To that end, here is a look at the next steps in the home buying process.

Step #1: Determine How Much You Can Borrow

Now that you have decide to buy a house, the first step I to determine how much you are capable of borrowing. You can get a good idea of how much you can borrow by reviewing your current financial situation, a pre- approved mortgage is essential to knowing your financial picture. You could go to a bank but we find it makes more sense to hire a qualified mortgage broker.  A mortgage broker has access to all the lenders and often the rates are lower than what a bank can offer. There will be lender guidelines to follow for qualification dependent on the area you are buying in. It is important to keep your debt ratios low before you buy a home, so no large purchasing at this time in order to borrow your maximum mortgage amount.

Step #2: Calculate a Down Payment

The down payment requirements can differ from place to place, state to state. Some places may even allow zero down payment options or borrowed down payments, even a combination of both. Its important to look at what is offered in your area. Your mortgage professional should be able to advise you as to what down payment options are available to you in your area.

When calculating your down payment, keep in mind that there are other costs involved with purchasing a home. Some of the other fees you will likely need to pay include:

  • Appraisal Fee – typically between $150 and $300
  • Home Inspection fee – typically between $150 and $400
  • Home Insurance – typically about $400
  • Land Transfer Tax – typically between $1,000 and $4,000
  • Municipal Tax – typically about $2,000
  • Lawyer Fees – typically between $900 and $1800
  • School Taxes – typically around $400
  • Moving costs – typically around $800

Be sure to have enough money set aside for these expenses when determining how much you can afford to pay on a down payment. It also would not hurt to save a little extra for unexpected expenses you might have once you are a home owner .  Does the home of your dreams need a little fixing up or renovation? You might also consider some extra savings for any renos or improvements you may wish to make as well as any purchases of furniture for your new home.

Step #3: Find a Home

Now that you have a good idea of what you can afford, it is time to hire a top real estate agent so you can start looking through available properties.  You will want to interview more than more agent to ensure you choose an agent you have a comfort level with. Be sure to ask your friends for referrals . Finding a real estate agent is a relationship, since you will be spending a lot of time with this person you will want to ensure you get along and are on the same page for what you are looking for. You will also want to ensure your agent is educated in the property type and has experience in the market area you want to buy in. Not all agents are created equal , so do your research.

When you meet with your agent, be sure to have answers ready for the following questions:

  • Do you want to live in the country, the city or the suburbs?
  • Do you want a new home or a resale home?
  • How much living space do you need?
  • How long do you plan to live in the home?
  • What amenities are you looking for in a home?
  • What kind of home are you looking for? Houses, detached , attached, apartment condos. Townhomes ?

By having a clear idea of what you are looking for, you will be better able to communicate your needs to your real estate agent.

With the help of a qualified real estate agent, you will quickly find the perfect home to suit your needs. Now, all you have to do is make an offer, obtain the necessary financing and close on the deal. Before you know it, you will be moving in to the home you have always wanted!

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