Often, the route to owning your own home can seem like a trip to the moon and back.
Really though, it comes down to five key steps:
1 â€“ Manage your credit wisely.
If there is one thing that will gum up the purchase of that perfect home, itâ€™s an unwise purchase or extra credit obtained. Keep your credit spending to a minimum at all times, make every payment on time and most of all pay more than the minimum payment. Remember that if you just make the minimum payment on your credit cards, chances are you will still be making payments 100 years from now.
2- Assemble a down payment.
At first glance, the challenge of finding a down payment can seem insurmountable. In fact, you just need to consider all the sources for down payment funds. yes, you will have saved some but remember you can also, in some situations, use RRSP funds, grants ( BC Home Equity Partnership for example ) and non traditional sources like insurance settlements, severance and of course, gifted funds from a family member. Donâ€™t forget that youâ€™ll need to demonstrate that youâ€™ve had the funds on deposit for up to 90 days and also that you have an additional one and a half percent of the mortgage amount for closing costs.
3- Figure out how much you can afford.
Itâ€™s at this point that most people usually stop and scratch their heads. Some even try and tough it out, using the raft of online calculators to figure it out, but new mortgage rules can make even that a challenge.
If you talk to a Dominion Lending Centres mortgage specialist ( like me! ) though, they can help you figure it out and even go as far as getting you a â€œpre-approvalâ€ from a financial institution. This can give you the confidence you need to actually start looking around.
4- Figure out what you want.
Youâ€™ll want to make a list of things your new home has to have and what the neighbourhood has to have. Things you want to think about are the things that are important to you now; is there access to a dog park? Is there ensuite laundry? Divide the list into things you canâ€™t live without and things youâ€™d like to have. Itâ€™s way easier to look when you know what you want to look at.
5- Look with your head, buy with your heart.
The final step is, with the help of a realtor, look at properties that meet your requirements. Yes, the market is a little frenzied at the moment, but remember, if your perfect property is sold to someone else, the next perfect property will soon appear.
When you do finally buy, chances are, youâ€™ll buy with your heart. My sister Noona moved to London some years back and after settling in, decided to buy. Her list was fairly lengthy, one of the key elements was being able to walk to work. In a market similar to what we face now, she found a property that met most of her requirements. In the end though, she bought with heart, mostly because of the view from the balcony.
The decision which home to buy is a tricky thing, it should be made with your head and heart. Deciding, while balancing what you think and feel, really is rocket science.
I know that this may seem to be an oversimplification but really, the thing that complicates the process is your own emotions â€“ all of the stress that comes along with making a life change can make the process challenging.
Dominion Lending Centres – Mortgage Professional
Jonathan is part of DLC A Better Way based in Surrey, BC.