It can be a difficult experience to buy your first home. There’s so much to learn when it comes to buying your first property, and when you’ve never done it before there’s a long list of new terminology to learn, hidden costs you had no idea about, financial surprises, and even conflicting advice depending on who you’re asking! So we put together these tips to help you make your first time home buying experience a smooth one.
Tip #1: Make sure you can afford what you think you can afford
It’s important to think as realistically as possible for you long before your lender starts crunching the numbers. Is spending more on a dream home worth compromising your lifestyle right now? Or would you rather keep the lifestyle and spend less on a home? In order to make the right decisions on critical issues, you must have an accurate monthly budget that you’re tracking for income and expenses. You can even track possible scenarios you are considering to get a realistic sense of how it affects your budget.
Tip #2: Understand what pre-approval is and is not
One of the biggest misunderstandings first time home buyers have of what a pre-approval means is to wrongly assume that a pre-approval is a guarantee for at least that amount.
A pre-approval only tells you that the lender considers an approval possible under certain conditions. A formal home approval can only happen once you’ve decided which property you want to buy.
Tip #3: Add up all your expenses
In other words, you’ll need to save up for more than just the deposit you put down. There are many significant costs involved with buying a home
Some of these costs include fees like stamp duty, application fees, valuation and inspections, mortgage registration and transfer, rate lock, title insurance and legal fees. Your mortgage broker can tell you which ones will apply to your home loan.