- What can I afford?
- It can be tempting to start shopping for a home right away, but you have to set a budget first.
You can apply for a mortgage pre-approval: a lender will analyze your finances and tell you how much you can borrow. He will probably offer you the maximum amount for which you qualify. That doesn’t mean you have to go that far. Buying a cheaper house can allow you to use your money in other ways, such as saving more for retirement.
Mortgage pre-approval helps establish your budget. It can also make you look better, essential in a hot real estate market. You arrive in front of the seller with an already established financial capacity. This shows him that you are a serious buyer to whom he could sell quickly and easily.
- When to start looking?
- Once you’ve established your budget, you can start searching through available properties.
Most buyers do their research online, making it possible to look at multiple homes. However, you will have to visit your favourites in person, since photos and videos hide serious flaws.
Before you begin, list your “needs” and “wants”. For example, a fireplace in the bedroom is a want, while a desk for working from home is a need.
Your list can also relate to aspects such as:
the neighbourhood,
proximity to schools and services,
methods of transportation,
the number of bedrooms and bathrooms.
If you are telecommuting, you might consider the suburbs or the countryside. You might not have done this when you had to commute every day.
- Do I need a real estate broker?
- With all the online information, it may seem simple to get started on your own. But a real estate broker can defend your interests during the transaction. In addition, brokers know the different neighbourhoods very well and will know if the price of a house is suitable.
Believe it or not, as a buyer, all this know-how is offered to you for free. The seller pays the entire commission, so there are only advantages to hiring a professional.
How much would it cost you to sell your house?
Ask friends and family for recommendations to find the right broker. You can also meet a few of them to make sure you find someone you are compatible with.
- What down payment should I plan for my purchase?
- Your down payment is the amount you pay before paying your monthly payments.
If your down payment is less than 20% of the purchase price, you must purchase mortgage default insurance. Bonuses will be added to your monthly payments.
Your mortgage lender can help you determine your ideal down payment amount. For this, it calculates your debt ratio. It adds up your monthly debts (housing, car loan, savings, etc.) and divides the result by your gross monthly income. It establishes the amount of an affordable monthly payment. This is how the amount of down payment needed to make your monthly prices reasonable is determined.
The larger your down payment, the less interest you will pay over the life of your loan. This is why many people accumulate a large down payment before beginning buying a home.
- Can I borrow the money for the down payment?
- Want to buy your first home? Check if you qualify for the Home Buyers’ Plan (HBP) through your Registered Retirement Savings Plan (RRSP).
Here’s how it works: you can withdraw up to $35,000 from your RRSP to buy or build a first property. If you believe the first house with your spouse, each can withdraw $35,000 from their RRSP. You will therefore have $70,000 for your down payment.
6 things you might not know about your RRSP
Keep in mind that this is just a loan. You will have 15 years to repay what you have withdrawn.
Find out how to RAP your RRSP to become a homeowner
- What am I looking for?
- Everyone has a different idea of ​​what the “perfect house” is, depending on:
The size of his family,
its budget,
their personal needs and desires.
Some want a house that is up to date and equipped with all the conveniences and can afford it. An outdated kitchen or worn floors will not put others off if they can buy at a reasonable price.
