Top five tips for first-time homebuyers

Buying a home can be an intimidating prospect for anyone. But for first-time buyers in particular, the process of buying their first property can feel even more daunting and confusing.

If you’re in the market for your first home, here are our top five tips to help you navigate the homebuying process as painlessly as possible – and help make your dream of homeownership a reality.

Tip #1: Save up for your down payment

As a new homebuyer, you’ll need to save anywhere from 5% to 20% of the purchase price of your new home as a down payment. On a $1-million property, for example, the down payment would likely need to be anywhere from $50,000 to $200,000 (or more).

If your down payment is less than 20%, you’ll also have to buy mortgage loan default insurance from Canada Mortgage and Housing Corporation (CMHC) or another insurance provider. That could add another 2.8% to 4.0% to the price of your home.

In most cases, the larger your down payment, the more flexibility you’ll have in choosing a place that has everything you need – and the more money you’ll be able to save in mortgage interest and payments over the lifetime of your home.

Tip #2: Get pre-approved for a mortgage

To find out how much home you can afford (and what your monthly mortgage payments will be), consider getting pre-approved for a mortgage before beginning your housing search.

Most mortgage pre-approvals will be good for two months or longer, so you’ll have plenty of time to find the right property. Plus, as an added bonus, being pre-approved can save you a lot of time, hassles and headaches later on, when you’re ready to close on your new home.

Tip #3: Don’t forget the closing costs

Once you have your down payment ready and you’ve been pre-approved for a mortgage, remember to leave room in your budget for all the other costs that come with buying a home.

This includes your monthly mortgage payments, but it can also include everything from legal fees, title insurance costs and the property transfer tax to the cost of getting a home inspection, having your utilities connected, paying condo fees or making any renovations you want to make your new home your own.

Tip #4: Take advantage of government rebates and incentives

Both the federal and provincial governments offer several rebates, incentives and other programs that are designed to help make homeownership more affordable for first-time buyers. These range from the federal Home Buyers’ Plan (HBP), First-Time Home Buyers’ Tax Credit and First Home Savings Accounts (FHSA) to provincial initiatives like the B.C. First-Time Home Buyers’ Program.

Together, these incentives can save the average first-time buyer thousands or even tens of thousands of dollars on the purchase of a home – savings which can be applied to your down payment, put towards other investment or lifestyle goals, or used to pay down your mortgage that much sooner.

Tip #5: Hire a REALTOR®

Finally, be sure to hire a professional REALTOR® who knows the real estate market in the Lower Mainland inside-out, who has experience with the neighbourhoods and types of housing you’re looking at, and who you feel you can communicate with and trust.

In addition to helping you find the perfect property, a REALTOR® can also help you put in an offer when you find your new home, take care of all the due diligence and paperwork – and negotiate the best possible deal for your new home.

Questions?

Contact us to discuss your unique goals and circumstances, or to get the answers to any questions you may have.