Posted: 1 Aug '20

Process for Buying Your First Home: What You Need to Know

Process for Buying Your First Home: What You Need to Know

If there's one thing that has remained consistent over the centuries, it is the pride that comes with living in your own house. However, before you become a homeowner, you must navigate the hurdles of the first time homeowner buying process. Call us today to get the process started!

There are many steps involved in buying a home. And, the process begins long before you begin searching for your dream home. As such, it requires meticulous planning. Read on to find out key steps in the first time homeowner buying process that you need to know.

1. Financial Preparation

Buying a house comes with two major financial obligations. First, you need to part with a downpayment, which is usually 5% of the value of the house. Once you start thinking of buying a house, create a savings plan to help you raise the downpayment.

In addition to the upfront sum, a portion of your income will also be committed to servicing the mortgage afterwards. As such, it is important to factor in all of your future financial obligations as you prepare to buy a house. This includes credit card balances, bills, new vehicle payments, and unexpected expenses.

Mortgage lenders also look at your debt-to-income ratio and credit score. These two sets of data determine whether you qualify for a mortgage and what rate of interest you will be charged on that loan. As you save for your downpayment, set up measures to help reduce other debts and make payments on time to improve your credit score.

2. Choose a Mortgage Broker

Mortgage brokers help guide you through the process for buying your first home and will ultimately lead you to the best mortgage for your financial situation. They will work for you at no cost to you, but only get paid by the mortgage lender if they help you obtain a mortgage.

3. Get a Mortgage Pre-Approval

Once you have started saving for the downpayment, set up an appointment with your mortgage broker to get pre-approved before you begin searching for a house. Mortgage pre-approvals ease the first time homeowner buying process in the following ways:

  • Gives you clarity on how much you can access
  • Ensures you do not waste time looking at houses beyond your range
  • Increases your negotiating power
  • Helps reduce the closing period
  • Prevents you from falling in love with a house you cannot afford

4. Work with a Real Estate Agent

Your mortgage pre-approval is locked in for 90-120 days. To increase your chances of finding the right house within this period, it is advisable to find a realtor. If it takes longer to find the right property, call your mortgage broker to extend your pre-approval.

Some of the benefits of hiring a realtor for the first time homeowner buying process include:

  • The networks within the industry will make it easy to find a suitable house
  • Their negotiating experience will ensure you get the best deal possible
  • Assistance with the paperwork

5. Have the House Inspected and Close the Deal

Before you close the deal on any house you find, have the house inspected to make sure everything is in good condition. As long as your offer is in place with the condition that the inspection is satisfactory, you are able to rescind your offer if needed. If there are minor fixes that are required, you can use this to negotiate the price down or have the seller take care of repairs before you take possession.

Get the Best Mortgage Deal with Mortgage Brokers

Getting the right house starts with a mortgage broker.

Dominion Lending Centers Mortgage Mentors is a mortgage brokerage that specializes in mortgages for first time buyers and gives you access to the best mortgage rates in Canada. Get in touch with us today for a smooth first time homeowner buying process. 

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