Since you are going to be investing in your most valuable asset, it is important to consider these tips before buying a home. Research is the key so make sure you do a ton of research before buying a home.
Check your credit rating
It is important you get a copy of your Equifax or TransUnion Canada credit rating before you buy a home. This report will determine your credit score and give you more information on your finances. If more than one party is planning to buy the house, a credit rating check should be done on both parties.
Everything on the report must belong to you, meaning that all the accounts that are currently opened/closed or any debts that you may have. It is important to report any discrepancies because the lender may ask with accounts are delinquent.
These records are really important when you are asking the lender for money. It will determine how much money can be borrowed and to see if you even qualify for a mortgage.
The next thing after looking at your credit report would be getting a mortgage pre-approval. They will pull up your credit report and determine the level of risk. They will also let you know what kinds of mortgages there are including structures and options. It is smart to do your own research as well as ask friends and family.
The lender will tell you exactly how much money you are pre-approved for that way you can start searching within your budget. If homes are outside the pre-approval amount, they must be paid in cash.
Also, the chances of you winning a bid (if multiple bids on the house occur) are higher if you attach a pre-approval mortgage letter. This means to the buyer that you are serious and have the funds to afford the house. Who do you think the buyer would choose: a person with no pre-approval or a buyer with a pre-approval letter (considering both offered similar prices for the home).
Once you have an idea of the price range you have, it is important to make a checklist. This will determine if the house meets these criteria or not. When you are making this checklist, it is important that you hire a realtor to speed up the process. We will talk about that in the next step.
While you are making a checklist make sure you figure out your needs and wants. What is needed in the house that you need every day? Do you plan on having children in the future or do you plan on downsizing (teenagers are moving out)? It is important to determine where you are in life so your home can adapt.
The wants are something that is not necessary and you can live without. For instance, a three car garage, or even a large theater room. Being adaptable is key since it is going to be impossible to check off every item on the list. Sometimes you might just have happened to find the perfect house in the price range, sometimes not. Be ready to adapt.
They will have the tools and resources to help when you are buying a home. They will follow the checklist and try to check off as many boxes as they can. A realtor will try its best to find a proper fit.
Realtors also have the knowledge of the industry and can tell you what to look for in a house if you are a first-time home buyer. This adds the benefit and takes the stress away from dealing with contact other realtors or homeowners.
Also, provide you with great resources to help you along the way. Realtors can help if you need to hire a lawyer or need any necessary paperwork done. They provide a great asset in buying a home.