…and what you need to know to get you started toward buying your 1st home!
People fear what they don't understand. A good example is the purchase of a home. The average consumer knows very little regarding the home buying process. Between finding the right house, making sure it won't fall apart the day after it is purchased, and finding the best financing, it is no wonder that so many people are afraid to purchase their first home.
Buying a home is one of the most important financial decisions an individual will make. For a first-time homebuyer, the decision to purchase a home can be daunting. It will represent a major step forward as the individual/family will potentially be assuming its largest financial responsibility. As with any major decision, it is important that everyone, especially first-time homebuyers, take full advantage of the information and training that is available so they clearly understand the home buying process.
Before beginning the search for your dream home, it’s important that you do your research and become more fully informed. Here are seven steps to get you started:
STEP 1: Visualize Yourself as a Home Owner
Before starting your house search, allow yourself to imagine what it will be like to be a homeowner. For most people, homeownership can be one of the most significant financial turning points in their lives. Imagine, living in a Home of Your Own! A fenced yard for the kids…A garage for your car…Enough room for all your stuff… On a quiet street…Privacy…
STEP 2: Pull Your Credit Report
Your credit history is one of the first things a lender will look at in making a decision on your loan. Review it carefully to be sure all the information is correct. If you find discrepancies, you should work with the credit agencies to resolve them.
STEP 3: Determine How Much Money You Have for a Down Payment
Saving for a down payment can be one of the biggest barriers to homeownership. Mortgage lenders recognize this dilemma and many now offer new products with low down payment options. Zero to five percent down payments are available with excellent credit and income, although it is highly recommended to have at least five percent down payment or more.
There are many ways to find or save for a down payment, consider various sources of income such as:
Save your tax refund
Savings Bonds / Investments
Chequing / Savings Account / RRSP’s – put the same amount away every pay cheque and watch it grow
Gifted funds from immediate family
Borrow against equity in second home if available (refinance existing property)
Hold a garage sale or sell big ticket items of value that you can part with
Take a second job (casual or part time) to save additional funds
STEP 4: Choose the Right Lender for You
The mortgage advisor/specialist vs. a mortgage broker. A mortgage advisor/specialist is someone who works for a bank and does only mortgages. They almost always have experience in other areas of finance so they will be able to look at your entire financial picture to ensure that you mortgage solution is the best for your needs.
Since a mortgage advisor only does mortgages and works solely on referral business, you can expect:
· The best advice for your financial situation
· Competitive rates and continued relationships
· Save you money by not charging loan origination fees
(Get the report 15 Questions You MUST Ask When Shopping For a Mortgage by emailing me at bryan.meere@
STEP 5: Get Pre-Approved for a Mortgage
Before you begin working with a realtor, see your mortgage professional and get pre-approved for a mortgage. This will not only tell you how much you are able to afford to purchase a property, but will also give you an idea of how much of a down payment you will require. You just call your mortgage professional, provide some basic financial and application information, then soon enough your mortgage professional will be in contact with you to let you know what you could be pre-approved for based on the information you have provided.
Once you continue to proceed with wanting to purchase a home, your mortgage professional will ask for further documentation to confirm your employment, income, the source of your down payment and other aspects of your financial circumstances. This can be a simple step-by-step process that your mortgage professional will assist you with to ensure you feel confident and comfortable about the home buying process to become a happy home owner, with the best financing available.
Your mortgage professional offers this service, (to get pre-approved)
STEP 6: Consider Using a Buyer's Agent
Most real estate agents represent the seller; they do not represent you as a homebuyer. There is a fairly new type of real estate agent called a "Buyer's Agent."
The buyer broker can disclose things to you about the seller (or the home) that they would not be able to if they represented the seller. They work for you, not the seller.
You do not pay their commission - the seller does.
The buyer broker can disclose things to you about the seller (or the home) that they would not be able to if they represented the seller.
If a real estate agent will not offer you a buyer agent agreement, ask "Why Not". . .or better yet, find another agent!
e-mail me if you’d like a recommendation to one of the best buyer’s agents in your area. I work with agents every day so I know which ones will work hardest for you!
STEP 7: Get Educated on the Home Buying Process
Many mortgage lenders, non-profit organizations, and even realtors sometimes offer homebuyer seminars to prepare you for homeownership. Seminars normally run about three hours and cover the basics of home buying. Some of the topics covered are “How to Apply for a Loan”, “Finding the Right Realtor”, “Making an offer on a Home” and “The Advantages and Responsibilities of Home Ownership”. The quickest and easiest way to get educated about the entire home buying process is to select a mortgage advisor and realtor who offer unbiased professional advice with your best interest in mind.
When you choose the right mortgage professional, with your best interest in mind…
· You can find ways to get out of the "trap" of paying rent.
· You’ll be confident that you made the right decisions about your mortgage.
· You’ll be at ease knowing that nobody rushed you into the wrong mortgage program because you had to apply for your mortgage within 3 days of signing your purchase agreement. Is 3 days long enough for you to make a decision that could last for 30 years?
Not too many real estate agents will teach you the information that I have just given you.