4 tips for the first-time homebuyer
Buying your first home is an exciting experience. But along with the excitement comes stress, anxiety and a lot of pressure.
Take it from me. My partner and I took the plunge last year.
From the age of 16, I made a habit of browsing real estate online. It was a strange fascination that I thought would totally prepare me. But I’d soon learn that the actual process of searching for and buying a home to actually live in wasn’t the recreation I had made it.
You find yourself asking pressing questions. Is it the right house? Will we have to move again in a few years? Can we really afford it? What needs to be done? How much will renovations cost? And the list goes on and on.
Here are a few tips for the first time homebuyer, from a first time homebuyer, to make sure you make the right move the first time.
Take your time
The minute we got pre-approved, we wanted our house right away. The urgency was understandable—I was a few months pregnant, my parents were undergoing renovations at home and I was nesting like crazy.
But rushing into a home can be detrimental—not only to your finances, but your future.
You have to think ahead. You want to make sure you’re making the most of your investment, because from now on, you’re paying a mortgage. You probably won’t have another opportunity to save the way you have been—especially if you’re coming from a place where you were paying little to nothing to live there (thanks mom and dad!)
Do your research. Look into different neighbourhoods and have an open mind, which leads me to my next tip.
Have an open mind
Consider your deal-breakers. For me, I didn’t want to pay maintenance fees. I thought they were a waste of money and I was only interested in paying down principle.
But I noticed that townhomes or condos with maintenance fees often meant a cheaper overall purchase price.
I was also determined to settle down in Pickering, Ont. It was one of my favourite places. It was convenient, close to my two jobs, not too far out of the city—and the neighbourhoods were beautiful.
But Pickering prices, much like the house prices everywhere else in the GTA and surrounding areas, were ugly.
So we settled in Ajax, a city just east of Pickering. We’re only two highway exits from where I wanted to be. We’re a stone’s throw away from huge shopping plazas, tons of restaurants, the highway and there’s even a French immersion school down the street.
You have to ask yourself whether your deal-breakers are really deal-breakers. Look into what maintenance fees cover. Calculate how much more of your mortgage you’d pay off if those fees went towards your principle. Consider what you save on gas if you settle on a smaller space in your desired location, rather than a bigger space further out. In the end, sometimes it all evens out.
Always spend less than your pre-approval
My partner and I were pre-approved for a lot more than we anticipated. But it didn’t mean we would budge on what we were comfortable spending.
The thing about mortgage brokers, banks and lenders is that they stay in business by making money off of you. So don’t be flattered if they offer you more than you thought you’d be allowed. They know you’ll find a way to pay it.
Do the calculations. I had spreadsheets to help me map out just how much home ownership would really cost—property taxes, hydro, water, utilities and maintenance.
The best way to see if you’ll pass the bank’s stress test is to start doing your own. Make sure you can cover the closing costs. Make sure you can still buy groceries. Make sure you can still fill your tank. What's the point in buying a home if you can't live comfortably?
Trust your gut
I spent years watching two shows that I often got teased about, Say Yes to the Dress and Property Virgins. I got teased because I was neither a bride nor a homeowner.
But those two shows taught me the same lesson: when you know, you know.
Pay attention to how you feel as you walk through the house. Imagine yourself living there. And I mean pyjamas and morning breath. It doesn’t have to feel like home at that moment. But if it feels like it could be, then talk to your partner. But if you have doubts, remember there will always be another.