5 crucial to-dos for new home buyers

New home buyers have a lot to look forward to when they embark on their homeownership journey! This is a big milestone, and definitely an exciting moment in people’s lives. However, buying your first home can also be overwhelming. While purchasing a home can be a complex process, there are certain actions you can take to put yourself ahead. To help you get started on the right foot, here are five crucial steps!

#1 Secure a mortgage pre-approval

The first and most important step for new home buyers is securing a mortgage pre-approval. A pre-approval is a preliminary assessment by a lender that determines what you might qualify for in a mortgage, and how much you may be able to borrow. This step is crucial for several reasons. First, a pre-approval helps give you a clear idea of what you can afford, which will narrow down your home search. This is important to avoid wasting time looking at properties you cannot afford. Sellers are also more likely to take your offer seriously if you’re pre-approved. It shows that you are a serious buyer who is already thinking about financing your future mortgage. Finally, the pre-approval process can highlight any issues with your credit or financial situation. This might not seem like a good thing, but it’s a blessing in disguise! It tells you what needs to be addressed before you can secure a mortgage. This gives you time to make any corrections before applying for your final approval.

#2 Create a realistic budget

Once you have your pre-approval, the next step is to create a realistic budget. This involves looking beyond the purchase price of the home and considering all the costs associated with buying and owning a house. You will need to consider expenses such as your down payment, closing costs, and ongoing costs. For your down payment, typically, you’ll need to put down at least five to 20 per cent of the home’s purchase price. This depends on the cost of the home, but in any case, you are looking  at a major upfront expense. Your closing costs are not quite as demanding, but are still significant. These are usually about two per cent of the home’s purchase price and include fees for things like inspections, appraisals, and legal services. Don’t forget about those ongoing costs, either! Property taxes, home insurance, utilities, and maintenance are all items that stick with you throughout your homeownership experience. When creating your budget, it’s also wise to leave some wiggle room for unexpected expenses. Owning a home often comes with surprises, and having a financial cushion can help you handle them without stress.

#3 Find the right real estate agent

A good real estate agent is invaluable for new home buyers. They can help you find homes that meet your criteria, negotiate the best price, and navigate the complex paperwork involved in a real estate transaction. How do you find the right agent? Talk to friends, family, and colleagues who have recently bought homes and ask about their experiences with their agents. You should also do your own research, look up agents online, read reviews, and check their track record. When you meet with potential agents, don’t be afraid to ask questions about their experience, familiarity with the area, and how they plan to help you find your dream home. Remember, you’ll be working closely with your agent, so it’s important to choose someone you feel comfortable with and who understands your needs!

#4 Separate your needs from your wants

When searching for a home, it’s easy to get caught up in the excitement and start dreaming about all the features you’d love to have. However, it’s important to distinguish between your needs and your wants. Your needs might include things like location, size, and condition of the property. You may need to be in close proximity to work, schools, and other essential amenities, for example. If you have a family, you will want to have enough bedrooms and bathrooms to accommodate everyone. If you are not in the position to take on major home renovations right now, a structurally sound home without major necessary repairs could also be important.

Your wants focus on less critical things, like certain features you would like to have, or your home’s appearance. For example, you likely don’t need a pool or home gym, even if you may want them. You might also have a preference for modern home designs, specific renovation styles, and the best materials, but these probably aren’t essential either. By focusing on your needs, you can ensure that you find a home that fits your lifestyle and budget. Once you’ve found a few homes that meet your needs, you can start considering your wants and seeing where you might be able to compromise.

#5 Contact a mortgage broker

A mortgage broker can be a valuable ally for new home buyers. Unlike a lender who offers their own products, a mortgage broker works with multiple lenders to find the best mortgage product for your situation. Brokers do the legwork of shopping around for the best rates and terms, saving you time and effort. They can also provide insights into the mortgage market and help you understand the different types of mortgages available. Plus, brokers often have access to a wider range of products than individual lenders.

When choosing a mortgage broker, look for someone with a good reputation, positive reviews, and experience in the industry. Don’t be afraid to ask questions about their process and how they plan to help you secure the best mortgage.

Buying a home is a significant investment and can be a complex process, but you can navigate it with confidence! With careful planning and the right support, you’ll be well on your way to finding and purchasing your dream home. Make sure to include a mortgage broker as you get ready for this exciting journey!

If you have any questions about your mortgage, give us a call at Centum Home Lenders! You can reach us at 506-854-6847, or get in touch with us here.