So you’re ready to buy your first house. Now what?
For someone who’s new to home-buying, there can be a lot of unknowns about how to proceed. What’s the first step? Who do you contact first?
The first thing to consider is how much you can afford. To determine that, have a look online for a mortgage affordability calculator to get a rough sense of what your budget might be. That’ll give you an idea of what types of properties you can be looking at and what price range would be of interest to you.
How much do you need to save? In Canada, you’ll need to have at least five percent saved up for the downpayment. Then the closing costs on a purchase will be about 1.5 percent. That’ll cover things like the property inspection, title transfer, and other fees. Fortunately, you don’t have to pay your realtor when you’re purchasing.
Your next step will be to check your credit. You can go to TransUnion or Equifax and pull a report for free. You get one of those per year. That’ll give you an idea of how your credit looks and whether or not you need to build or repair your credit before moving forward.
From there, what you want to do is get preapproved. We recommend you work with a qualified mortgage professional who’s done this many times before and can get all of your questions answered. They’ll need some information from you about your income and your employment history. Get that to them and they’ll give you your preapproval amount. Sellers like to see that you’ve already been preapproved for a mortgage when they’re reviewing your offer.
At that time, you’re ready sit down and meet with a realtor. You want to find someone you can trust, either someone that’s been referred to you or is respected in the industry, and together you’ll do a needs assessment. Have that conversation and talk about the types of properties that you’re interested in and where you might like to live and the realtor will go to work for you.
Once you’ve seen a few properties -- maybe five, ten, or, in some cases, 40 if it takes that long -- it’s time to make an offer. Your realtor will manage that whole process for you to talk about terms and conditions, deposit funds, and what all is involved. The will write the offer, submit it, and negotiate it for you. And in the background, they’ll also be sending documents off to lawyers and to your mortgage broker to make sure that they have everything that they need to finalize the mortgage and get it in place.
Possession day is the when those funds transfer and the property becomes yours. You’ll likely do a prepossession walkthrough the day before just to make sure the property is in the kind of condition that it should be. After that, all that’s left is to get moved. Congratulations. Now you’re a homeowner!