Ready to buy your first home? What an exciting time for you and your family! Purchasing a home can be a huge investment, and it’s very likely one of the biggest life decisions you’ll ever
Ready to buy your first home? What an exciting time for you and your family! Purchasing a home can be a huge investment, and it’s very likely one of the biggest life decisions you’ll ever make. As exciting as it is, it can be stressful, and overwhelming when there’s so many decisions to be made.
We want to help ease the burden of stress with a few handy tips for first-time homebuyers in Ontario. With the right resources and the right advice to make sure you’re properly on track, you’ll be ready to purchase your new home in no time! Happy house hunting!
Tip no. 1: Get insured.
Seriously – don’t skip this step. Here’s why.
Home insurance protects your physical dwelling, your home’s contents, and your liability. If you got into a lawsuit, or if your home burned down in a fire, you’d be left having to do repairs, pay off your defense costs, or buy a new home altogether out of your own pocket. Not many people can afford to do that. Home insurance doesn’t cost a ton each year and can save you considerably overall on your costs. Plus, it’s peace-of-mind. Most mortgage lenders will also require home insurance.
You can get the best home insurance in Ontario by shopping around with top-rated insurance brokers.
Tip no. 2: Get the home inspection.
It can be tempting to skip over this portion of the process, especially if you’re eager to close on your home purchase, but don’t! It’s a vital part of the process, and if you skip it, you could end up paying a lot more down the road for unforeseen repairs that can rack into the thousands of dollars. Home inspections may cost you a bit upfront and they will delay your purchase by a bit, but it will give you the peace-of-mind you need – and may even ultimately save you money!
Tip no. 3: Try to pay off your mortgage faster.
If you want to pay off your mortgage faster, there’s a few ways to do it. You can increase how many payments you make each year, i.e. by paying every two weeks rather than monthly. This will save you thousands of dollars in interest over the years, and it won’t make a huge, tangible difference in your cash flow.
Tip no. 4: Don’t dump all your savings into the down payment.
Remember – closing costs are a thing! As a first-time homeowner, it’s easy to forget that there’s more to pay even after the down payment has been completed. You’ll need to budget at least an additional 2.5% of your initial purchase price to ensure you can cover all consequential legal fees, including insurance, utilities, taxes, moving costs, and of course, the home inspection.
Tip no. 5: Obtain a warranty that the home hasn’t been used for illegal purposes.
And get it in writing, too! Hundreds, if not thousands of homes in Ontario have been used for illegal operations, or to grow marijuana before it was legal. You’ll want to ensure your offer to purchase is complete with a warranty that states the property you’re intending to buy was never/has never been used for illegal purposes. These homes can be worth less overall, have dangerously re-wired electrical systems, and may accumulate mold from moisture easily due to lack of maintenance from the previous owner or previous owners.
Tip no. 6: Do your research.
Being a first-time homeowner is daunting. The Canadian Mortgage and Housing Corporation offers information and an excellent guide for all the questions you’ll be needing to ask yourself before you purchase your first home. This program even offers worksheets to walk you through the process, as well as it provides you info on tax credits, government programs, and more.
Tip no. 7: Work with a real estate agent.
Real estate agents – reputable ones with experience – are a valid investment. Get one that knows the neighbourhood you’re planning to move into. For a first-time homebuyer, this is critical, and you’ll want to budget a little extra cost to ensure you’re getting a good one. You never know how valuable their insight might be, and your first home is a huge investment!