It’s an exciting time in your life. You’ve decided you’re ready to buy a home. Now what? It can be confusing to know where to start, so here are some tips to get you started and hopefully make the process of becoming a homeowner as smooth as possible.
- Start with a pre-approval
Before you start looking at homes, sit down with a Westoba Credit Union Mortgage Specialist to discuss your plans and figure out what you can afford. We will crunch the numbers for you and tell you what amount is realistic. If you get declined or are approved for less than you were hoping for, we will work with you to help you better understand what is limiting you and discuss how to work on it.
- Work on a down payment
It is crucial for you to have at least 5% plus closing costs (typically 1.8% of the purchase price) set aside. Without these funds, it will be challenging to get approved for a mortgage. If you do not have your down payment, let’s work on a plan to help you get there. Other options include a gifted down payment, or if you have non locked in RRSPs, participating in the Home Buyers’ Plan.
- Be aware of your credit score
Always be sure to pay any loans or credit cards you have on time. A poor credit score, resulting from late or missed payments, can significantly impact your application and your interest rate. If you are looking to improve your credit score, check out our guide.
- Have a budget in place
Purchasing a home includes more than just a down payment. Do your research and build a budget to help you figure out what expenses you can afford each month. Your budget should include things like utility bills, property taxes, insurance (both home and personal), groceries, gas etc. Get started with this helpful Budgeting Workbook.
- Think about renovations
The home you fall in love with may require renovations. We recommend adding funds onto your mortgage amount before it is finalized to cover these costs. If you decide to go the route of a fixer-upper, you may be interested in our Purchase Plus Improvements Mortgage.
- Prepare for extra expenses
Don’t forget to set aside some money for extra expenses like new furniture, inspections, home insurance, an appraisal, taxes etc.
- OPTIONAL: Take advantage of the First-Time Home Buyer Incentive
The goal of this government program is to help lower monthly payments for first-time home buyers. It allows buyers to receive a non-interest-bearing loan between 5-10% to be put toward the down payment. Click here to learn more about the First-Time Home Buyer Incentive!
If you are thinking about buying a home, get in touch with a Westoba Mortgage Specialist, and we’d be happy to walk through all these steps with you in person or virtually.