The Basics of Home Buying – How To Streamline The Process
What exactly is involved in buying a home? To make your home buying experience as streamlined as possible, there are some things you should consider before you begin. Knowledge is power, and we are about to give you some powerful tips on the basics of finding and then buying your perfect home.
Committing to Your Location
Do you have an idea of how many years you intend to live in your new home? Longer is better, it will save you money in the end. A typical mortgage term lasts for five years. Planning on staying in your home for those five years, or even longer, is a good financial move. If you end up moving from one home to another ever couple of years, you will be paying Realtor® commissions and other fees for each transaction. If you know your job will be requiring you to move often, is buying a home a wise financial decision? Staying in your home for a longer period allows you to save money and builds equity in your investment.
Keep A Close Watch On Your Credit Score Rating
Before the 2008 housing crises in the United States it was a lot easier to secure a mortgage. The new guidelines are tougher and lenders are being more careful about who they do business with. Having a high credit score makes it easier to get approved for a mortgage. Banks and lenders feel more comfortable dealing with you if your financial history shows you honor your commitments.
Dream all you want of that fantasy home atop a hill surrounded by acres of meadow and forest, but then bring reality into the picture. Yes that dream may give you ideas of what you want in a home, but is it really within your budget? If you buy a home that costs more than you can comfortably afford, you may be sacrificing some of the simple pleasures of daily living. If you have been pre-approved for a mortgage, you will already have a good idea of what you can afford. A rule of thumb is that not more than 35 percent of your take home pay should go towards a mortgage payment. This allows you to live comfortably and within budget.
Save for a Large Down Payment
The more money you put down on your dream home, the better. Lenders tend to offer preferred lending rates and mortgage terms to clients with large down payments. If you put at least 20 percent down, you won’t be required to take mortgage insurance with CMHC. Since this insurance usually costs 2.5 percent of your home’s selling price, this saves you money upfront. Zero down payment options are at times available.
Even if you don’t have children, it’s a good idea to check out the schools in the neighbourhood. Your dream home is an investment, and if you decide to sell that investment, having a good school in the area will make it more attractive to a wider network of buyers. Check out the primary and secondary schools and get feedback on their records. Is there a number of post secondary education facilities nearby? If your chosen neighbourhood has a good school or easy access to higher learning venues it can increase your property’s value, and the salability factory.
Work With a Professional Realtor®
The computer has opened up the world of real estate in a big way. It’s easy to go online, find homes and in some cases buy and sell those homes all without consulting a living, breathing Realtor®. A face-to-face buying or selling partnership provides you with inside knowledge and a feeling of security. A professional agent is there to make sure all the appropriate papers and legal legwork are taken care of and that your transaction is above board and successful. We can help you with finding the best deal on your dream home. The commission for this service is paid for by the seller.
Get Mortgage Pre-Approval
Avoid the disappointment of finding an ideal property and then finding out that it is financially beyond your reach. Getting your mortgage pre-approved makes sure you are only presented with homes that are within your price range. The pre-approval involves talking to a mortgage professional and looking at your financial situation. This preliminary process is quite accurate and helpful as long as you are honest with your financial facts. Pre-approval also lets sellers know you are serious and tend to be more inclined to consider your offers on their properties.
Knowledge is Power, So Use It
A professional Realtor® offers a wealth of knowledge to help in the search for your perfect home. By using their years of experience they can analyze the real estate market in your preferred neighbourhood and help you find the best deal, and when the time comes, make a reasonable offer. Your agent looks not only at the asking price of homes in an area, but what they actually sold for. When it comes to that offer, this keeps you from bidding too high, which just wastes money. It also keeps you from coming in too low and not even getting a reply back from the seller.
Property Inspections Are Important
It is wise to get a pre-offer property inspection before you make that offer. The tighter the real estate market, the more common these become. A house inspection is included as a condition of sale in standard home offers. By getting a pre-inspection you can avoid bidding on a home that has thousands of dollars worth of hidden problems. If you do decide to make an offer, you can opt to have the repairs listed as a condition of sale, or ask for a price reduction.