6 tips for first time home buyers

6 TIPS FOR FIRST TIME HOME BUYERS

Jackie Woodward // Mortgage Broker // TMG Phone: 866.932.8412 // Email: [email protected] // Visit: www.mortgagegirl.ca

YOU KNOW THAT SAYING, “I WISH I KNEW THEN WHAT I KNOW NOW?” BUYING YOUR FIRST HOME IS NO EXCEPTION SINCE IT

WILL LIKELY BE THE LARGEST PURCHASE IN MOST OF OUR LIVES.

BASED ON THE MANY CONVERSATIONS I HAVE HEARD OVER THE YEARS WITH EXISTING HOMEOWNERS, I THOUGHT IT WOULD BE

INTERESTING TO SHARE THE TOP 5 COMMENTS I HEAR MOST OFTEN. I HOPE YOU CAN BENEFIT FROM THEIR EXPERIENCES!



AVOID TAKING ON NEW DEBT BEFORE YOU MOVE IN

•  Just like you don’t put the cart before the horse, don’t put the car before the house. After receiving a mortgage approval, you may be in the “borrowing mood” to go and buy some items that you may “need” to go with the house, perhaps some new furnishings, some building supplies or even a new car.

•  These actions could spell disaster as your approval could be withdrawn if

there are any significant changes in your financial situation between the time you put the offer in on the new house to the time you get the keys.

•  Taking on a higher debt load affects your mortgage qualifying calculations

and moral of the story is to wait until your mortgage has closed and you have the house keys in your hand before you accrue any more debt. Or better yet, save up and pay for it in cash if you can. Your credit score will thank you.



STAY IN TOUCH WITH EVERYONE

•  The home buying process involves a lot of people; the realtor, the home inspector, the mortgage broker, the lawyer, the home insurance rep, etc. I hate to say it, but sometimes the left hand doesn’t talk to the right. You can’t assume that your realtor is going to call everyone to update them if there are issues with the inspection, same goes for the lawyer who may not call the mortgage broker if they are having serious lender issues.

•  What you can guarantee is that all parties involved in the home buying process are going to keep you updated as everything progresses, so it is your duty to make sure the pertinent information gets to the right people to prevent added stress. As a mortgage broker, we are constantly in touch with the client and realtor during the mortgage approval stage, but once that approval is unconditional, it goes to the lawyer’s office and the ball is in their court.

•  To prevent surprises, I suggest you touch base with all the key players in your home buying game at least one week prior to your possession date to ensure all are on the same page and you are prepped for an easy home run.



DON’T QUIT YOUR DAY JOB

•  Save any position or employer changes until after you’ve moved in. A mortgage application is approved based on the information at that time. If you change your employment at any time during the mortgage application process, your approval could be withdrawn.

•  So before you make any kind of job changes, talk to your dedicated mortgage professional first to make sure it doesn’t cause any issues with your approval.



FINANCIAL PLANNING

•  By financial planning, I mean a full financial health strategy. This strategy can include additional insurance coverage as you’re taking on a large asset and liability, or a savings plan for property repairs and maintenance.

•  I’m trying to encourage you to be proactive instead of reactive when it comes to this kind of thing as I know planning for the distant future is not on the minds of most borrowers who are excitedly planning to move into their new home. You don’t test your boat for holes when in the water, you prepare it beforehand. Ensure you’re protected before something happens, instead of after the fact.

•  I know financial planning and insurance coverage is not most people’s idea of a riveting conversation starter, however, at least explore your options to see if protection is something that can be worked easily into your budget. Better safe than sorry, right?!



PLAN AHEAD

•  Right on the tails of talking about your financial health, let’s chat about planning ahead. What would happen if your mortgage payment doubled in 5 years, would you still be able to afford the lifestyle you’re accustomed to? What about if you got sick and couldn’t work, would your mortgage payments get to be too much to handle? These are the types of things we discuss when qualifying a borrower for a mortgage.

•  You are not just buying this home for today, you’re building your future and your home is a large asset in that equation. I’m a live in the moment type of girl and I get that thinking too much about the future can be stressful. So my motto is: “Expect the best, prepare for the worst”.

•  Make sure you have some savings set aside for emergencies, and when you’re purchasing your new home ensure your mortgage payments are manageable. In most cases, I can guarantee you that mortgage rates are going to go up faster than your income.



TOP UP YOUR CLOSING COSTS

•  First you have your real estate deposit, which gets credited towards your total downpayment amount, which then all goes to the seller at closing time along with the mortgage funds to equal the total purchase price.

•  Then there is your closing costs. These costs can include things like lawyer fees, property tax adjustment, interest rate adjustment, etc. All of those come before you even move into the place.

•  To reduce stress at closing time, make sure you have at least 1.5% of your purchase price, in addition to your downpayment and deposit to cover the other costs associated with buying a home.



IT USUALLY PAYS TO LEARN FROM OTHERS’ EXPERIENCES RATHER THAN PAYING FOR YOUR OWN.

I HOPE THESE TIPS WILL HELP KEEP STRESS TO A MINIMUM

WHEN YOU’RE PURCHASING YOUR FIRST HOME.

AS ALWAYS, I RECOMMEND YOU TALK TO FRIENDS AND FAMILY WHO’VE BEEN THROUGH THE PROCESS, AND PROFESSIONALS YOU CAN TRUST TO STEER YOU IN THE RIGHT DIRECTION WHEN

IT COMES TO HOME OWNERSHIP.



MORTGAGE QUESTIONS? PHONE: 780-433.8412 EMAIL: [email protected] VISIT: WWW.MORTGAGEGIRL.CA LIKE: WWW.FACEBOOK.COM/MORTGAGEGIRL.CA FOLLOW @MORTGAGEGIRLCA



6 tips for first time home buyers

Real Estate