5 tips to help first-time buyers get ahead

Are you getting ready to buy your first home? First-time buyers have a lot to prepare for in this real estate market! From budgeting and mortgage approvals to the anticipation of submitting offers, it can be a stressful process for many. The market is a bit unpredictable, and prices are continuing to rise. You might be wondering if there’s anything you can do to get ahead and prepare yourself better. Here are five tips that will help first-time buyers stay organized, save time, and potentially save money.

1. Get pre-approved 

Securing a pre-approval is one of the most important parts of the home buying process. It can especially help first-time buyers feel more prepared in the market. A pre-approval is when a lender examines your financial situation by looking into your employment, income, debts, assets, and anything else that impacts your finances. Based on those details, a lender gives you an estimate of the mortgage amount they may approve you for. A pre-approval isn’t an approval, and you will need to do your best to keep your financial situation the same in order to secure the mortgage once it’s time to apply. However, it definitely shows you what you can expect when you enter the market. Plus, with a pre-approval, the approval process often moves faster. This is because a lender already has a lot of your information on file and has verified important documents beforehand, so you aren’t starting from scratch.

2. Use a real estate agent

Real estate agents are indispensable when you’re buying your first home. Agents help first-time buyers with endless tasks like finding homes to view, completing paperwork, and submitting offers. Plus, sellers take buyers with agents more seriously, because it shows they have a professional on their side and are serious about committing to the sale. In fact, many sellers won’t even consider a buyer without an agent. Agents make the experience of buying your first home so much easier, and it’s best to have a professional by your side throughout the process. You won’t know everything about the market, which is why you need someone who does to help.

3. Budget accordingly

Budgeting is a huge part of buying a home, and there are many steps in the process where you need to seriously consider your budget. You obviously need to know how much you can afford to spend on a home, which involves thinking about your down payment and monthly mortgage costs. You need to budget to save at least five per cent for your down payment, and in some instances, up to 20 per cent. Be ready to make regular monthly payments for your mortgage as well, and pay for closing costs like legal fees, land transfer tax, home inspection, etc. As a first-time buyer, it’s hard to know when you might need to make an unexpected payment, but you should always keep an emergency fund for unexpected costs.

4. First-Time Home Buyer Incentive

The First-Time Home Buyer Incentive is a great way to help new Canadian buyers enter the market. This program is a shared-equity mortgage with the federal government, created to help first-time buyers have a larger down payment, and therefore, a smaller mortgage. The government contributes to your down payment, often five per cent. This means your down payment is bigger than it might have been on your own. With a bigger down payment and a smaller mortgage, you can expect lower monthly payments. Buyers can also get involved in the market sooner because they don’t have to spend quite as much time saving.

5. Use a broker!

A mortgage broker is one of the best people to have by your side if you’re hoping to get ahead in the market. A broker’s job is to help first-time buyers understand their financial situation, and find potential lenders who might be able to give you a mortgage. Brokers negotiate with lenders for you, and they look for the lender who suits your needs the best. In short, they work with your best interests in mind. Best of all, brokers don’t cost you anything. Lenders pay brokers a fee when a broker helps secure a deal with a client. These fees are standard across the industry too, so there’s no bias or reason for brokers to push you to any specific lender. 

You should be excited about buying your first home! These tips will help ensure you have the smoothest experience possible, so you can look forward to getting the keys and making yourself at home. 

If you’re a first-time buyer looking for some guidance, feel free to reach out! Give us a call at Centum Home Lenders at 506-854-6847, or get in touch with us here.