15 Must-Have Tips For a First Time Home Buyer in Alberta
It's never been easy for first-time home-buyers to get on the housing market. However, that's certainly just as true now as it's ever been.
But if you've worked hard for many years to be able to afford your own home, you should be proud of what you've achieved.
When taking your first steps into home ownership, it's easy to get carried away by the excitement of it all. But you're about to make what could be the biggest purchase you'll ever make.
It's an incredibly important decision for you. That's why it's essential that you make sure you're well prepared for what's ahead of you on your journey.
We've put together the 15 must-have tips for any first time home buyer Alberta resident. Keep reading to find out these juicy tips to make sure you learn from the experience and knowledge of the experts.
1. There's No Rush
Many people are desperate to get on the property ladder as soon possible. You can see why. Everything from the financial security to the wealth creation that owning your own home involves making it a popular choice for many people.
However, the rush to collect enough dough to build up a downpayment on a property leads people to make mistakes.
For instance, there are banks and insurance companies that are willing to cover you or provide loans so you have enough to buy your own home. However, the repayments could turn out to be staggering.
That's why most real estate experts suggest that home buyers should be looking to raise at least 20 percent of the total price of the property. Even though this might require compromise and sacrifice, it's certainly worth it, in the end, to make sure you're getting the best deal for you and your family.
2. Get to Know the Housing Market
Getting to know the housing market in which you want to invest in an essential strategy for first-time buyers. Just a lion studies his prey, you always have to ready to pounce on a property if the time is right.
Timing your purchase perfectly can make a huge difference to how much you pay. There are many things that can affect the fluctuating price of a property. This can include anything from the booms and busts of the American economy to the local incident that hit the news.
This is mostly determined by what's called a seller's market or a buyer's market. If you're bidding in a seller's market, you'll probably end up paying over the odds for the property. Whereas, in a buyer's market you might snap up a bargain.
However, there's no one-size-fits-all answer to getting the timing right. All you can do is get to know the housing market the best you can, to give you the best chance of investing at the right moment.
3. Educate Yourself About Home Buying
You're reading this blog post, which shows that you're serious about educating yourself about home buying. There's so much to learn about, you have to do even more research than checking out this blog.
There are many opportunities to learn the information you need to as a first time home buyer in Canada. This includes everything from classes provided by community groups to resources in your local library and online.
4. Shop Around for the Best Lender
One of the most important tips for first time home buyers is to make sure you shop around for the best lender. It's easy to simply go with the first lender you speak to.
However, it's important to get hold of as many estimates for loans as possible. You can never have too many estimates.
After this, you need to compare and contrast the different qualities of each. This mostly comes down to the monthly payments, the interest rates, and the origination charges.
While half-a-percent might seem like nothing in the grand scheme of things. But you have to remember that even the slightest difference between interest rates can cost you thousands of dollars in the long term.
5. Consider a Renter
You're preparing to buy your own home for the first time, it's possible that you're ready to live alone without housemates. Or maybe it's time you growing family settle down in a home you can call your own. Despite this, it's important not to dismiss the prospect of considering a renter.
With a renter paying your monthly payments, you'll find that you can not only share the cost of the living. But it's a chance for you to generate additional income to pay off your mortgage payments. By including a renter in your calculation, you might find that a more expensive property is suddenly affordable for you.
However, you might be thinking that you don't have to consider a renter at this stage. While this might be the case. If you decide to take in a tenant to your new home, this may influence the kind of property you purchase.
For instance, many people search for a home with multiple units. This would allow you to maintain your privacy, while also the ability to have a renter. Because of this, getting a renter can be a great financial opportunity that too few first time home buyers consider.
Even if you consider a renter too much of a commitment for you, there are many other options to make an income while paying off your mortgage. Renting out rooms on Airbnb is becoming increasingly popular.
6. Find Out About the Community
You might have fallen in love with the home of your dreams. However, many first time home buyers make the mistake of not seeing the bigger picture.
After all, unless you're buying a property in the middle of nowhere, the community in which it's located matters too. That's why it's really vital that you find out as much as you can about the community.
However, you should also make sure you look into how the community is changing. This is because, even if you like the community as you see it, it's important to check out where it's heading too.
You can find information about crime rates and the rate at which restaurants and stores are opening or closing in the community. This will give you a better understanding of how much your property will be worth down the line. But also, it could make or break regarding whether you want to purchase the house in the first place.
7. Mortgage Underwriting
If you're trying to purchase a property in an especially competition market, you might find that you are repeatedly beaten by investors. After all, many investors have the capital to be able to offer the property seller cash. For many sellers, this is preferable.
However, with a pre-underwriting mortgage, you could stand a better chance against competitors. This is where a lender assesses the risk involved in giving you a loan by analyzing your income, credit rate and assets.
If you pass these tests with pre-underwriting your mortgage, this could give you greater negotiation leverage.
8. Know What You Can Manage
Many first-time home buyers go with the largest mortgage loan they can get their hands on. If you have a hefty income, substantial savings, and little debt, you might find that you qualify for a huge loan.
However, you should think seriously about whether you want to accept this. You should start by listing your monthly expenses rather than the income from your salary.
After you've done this, whatever is left over from your monthly income is what you can afford in house payments. Otherwise, you risk getting saddled with a mortgage you can't afford to pay.
9. Less Can be Wise
Even the leftovers from your monthly salary might be too much to pay for your property. After all, this could leave you with little wiggle room if you are faced with a financial emergency. Plus, you might not be able to afford to save anymore.
This is why you should consider buying a property that is worth much less than you could afford. This avoids the situation where you put all your eggs in one basket financially speaking.
10. Remember the Hidden Expenses
It's also essential that you don't forget that purchasing a home involves an investment and expenses that are beyond simply the cost of the property itself.
After all, there are the real estate fees, legal fees, and home inspector fees. There could also be the additional costs of title insurance any urgent renovations or furnishing that you need. It's easy to forget the many hidden expenses involved in purchasing a home.
11. Think About the Future
When you're buying your first property, it's easy to get drawn into the excitement of it all. However, it's important to make sure you're considering the future as well.
You never know how your life might change in a decades time. This could include anything from having more kids, or be having to take in elderly relatives.
Because of this, considerations such as the quality of the local schools and how many bedrooms you require should be considered too.
12. Keep Resale Value in Mind
Another aspect of thinking about the future is considering the resale value of your property. It's easy to focus on the here and now when you're a first-time home buyer. But there could be one day when you want to sell the property yourself.
That's why you should always consider whether you'd be able to resell the property at a profit. Is it an up-and-coming neighborhood? Does it have beautiful backyard views?
Keep in mind the things that home buyers look for in a home. That's why, when you buy a property, it's important that you're not the only person in the world that wants to live there.
13. Hire a Property Inspector
It's really important to make sure you hire a property inspector to service the property before handing over any money.
You should be able to find referrals from friends, colleagues, and family for a good property inspector. But it's still important to do some of your own research into getting a good deal. Don't take anyone's word of it when it comes to hiring a property inspector.
14. How Qualifying a Mortgage Works
It's also good when buying your first home to learn about how to qualify for a mortgage.
Basically, it comes down to checking your recent history with handling money to assess whether you can be trusted to pay back the loan. But it's good to have a deeper understanding of the different requirements for a mortgage.
If you don't know your stuff, you could risk being charged a higher interest rate on your mortgage loan.
15. Be Organized
Part of applying for a mortgage is a presentation to the bank. It's your responsibility to demonstrate to the bank that you have your paperwork in order.
That's why it's essential to make sure you have your tax returns, bank statements and any other financial and official documents available when speaking with the bank.
Finding Your First Time Home Buyer Alberta Estate Lawyer
If you're looking into buying your first home, it's important to make sure you keep in mind our tips.
But it's also vital that you have a trustworthy and experienced estate lawyer to help you.
Our law blog is packed with tips to help any first time home buyer Alberta, resident.
For more useful resources, check out our legal resources page or our useful links page. Or, if what you really need is legal advice from a live professional, head to our contact page.