Before purchasing, new homebuyers need to know that house prices have soared in recent months, with no sign of a downturn. The market is more complicated, so homebuyers need to proceed with caution and a plan. With that in mind, here are a few tips specifically for first-time buyers in 2015.
Before beginning to look for a home to buy, you need to save enough money to put down at least 20% of a down payment. Being preapproved for a larger mortgage depends on job security and how quickly you’re able to pay off your debts. The key to this step is to discover how much you’re able to comfortably afford.
Create a hypothetical budget before purchasing a new home. There are a lot of extra costs associated with buying a home, such as closing fees and house taxes. Costs not associated with the home need to be considered in the budget as well: car payments, phone bills, Internet and cable bills, any childcare costs, and the bare necessities like groceries. With prices of the essentials going up, not being able to budget for each cost is one of the biggest blunders someone can make when planning to purchase a new home.
Once you’ve thought your financials through, choosing location versus space should be your primary decision. For example, choosing a house in Woodbridge, Ontario will run you around $600,000 or more for a detached, two-storey, three-bedroom home; a little further north in Bradford, the same home will cost around $450,000. If you don’t mind a drive, choosing a home away from the city will benefit your pocket.
The second thing on your list is to look around the neighborhood. You should be considering schools, childcare, distance to work, traffic in the area, and distance to stores. Overall, decide if the community is a place you could call home.
Also, be sure to include an inspection as a condition in your offer. Not having an inspection makes you responsible for anything you find, including mold, mildew, or a leaky roof, and the cost to fix these problems will come out of your pocket.
Lastly, plan ahead! Purchasing a home is likely the largest purchase of your life, so make sure you love everything about your new home. Take your time, look at the details, and consider everything.
And congratulations! You’ve taken your first step towards buying your first home.