If you’re buying your first home, it’s easy to make mistakes that cost time and money. Knowing the top missteps that first-time home buyers make and how to avoid them will go a long way to ensuring this significant transaction is more successful and less stressful.
Consider Future Use When Buying Your First Home (Yours and Future Owners!)
The neighbourhood and surrounding area, including proximity to schools, amenities, and parks, will all affect both the enjoyment you’ll have while living there and the home’s future value when it comes time to upgrade and sell the property.
One thing about schools often misinterpreted is if you’re too close or your property backs onto a school, it can be seen as a detriment. For one thing, the hour before school starts and when it lets out in the afternoon means you’ll see tons of traffic twice a day except during holidays. If you work from home, recess and lunch breaks can get loud.
If you don’t have children or aren’t planning to have a family right away, you may not be thinking about schools, but it’s still worth researching.
This article from realtor.com will give you more pros and cons about being near schools.
How Much Work is Required to Complete a Renovation?
Call it HGTV syndrome, but many people perceive that knocking down walls to create an open-concept space is no big deal. You have to understand the scope of the work and the cost associated with it. Is it within your budget, and how long would it take?
Something like flooring may seem relatively easy to replace until you know what’s underneath and the extent of work required to remove the existing flooring and prepare it for the floor you want.
Conversely, older homes usually offer a more appealing price point. It may not have all the upgrades of your dreams, but spending less gives you more wiggle room to make it your own.
There are plenty of DIY YouTube videos out there, but in some cases, you might not be able to do the work needed, and you’ll need to hire a painter, plumber, or electrician. Be honest with yourself about your capabilities when it comes to renovating or repairing your biggest asset –mistakes care costly.
Can You Get Approved for a Mortgage While on Probation?
You may have trouble getting a mortgage if you have a new job, especially one in a new line of work. Even if you’re making more money, switching jobs makes you look riskier.
Employers are allowed to impose a three-month probationary period on new employees; in most cases, you won’t get financing during this time frame. If you feel your new employer is happy with your work and you’ve only been there a month, you could ask if they’ll waive the probationary period if you explain you’re trying to get a mortgage.
You also shouldn’t change your job between buying a home and closing. The lender may then ask for updated proof of income.
What Documents Are Needed for a Mortgage Approval?
You don’t want to scramble to get your paperwork at the last minute. Here are some things you want to have ready to go:
- Notice of assessments
- Income confirmation of income (T4s and T5s)
- Ensuring taxes are up-to-date
- Good credit score
- Employment verification
Will The Bank Check my Credit Again Before Closing?
Now is not the time to buy a new car, take that dream vacation, or make any major purchases. Keep your credit card balances as low as possible. Even if you’ve been pre-approved, you can still be denied a mortgage because lenders will check your credit again just before closing. That also means you don’t want to co-sign for someone else’s loan.
Unless otherwise stated, deposits in Ontario are required within 24 hours of an accepted agreement. So, make sure that money is instantly available. If you need to pull funds from an RSP, a GIC, or sell something to get that money, make sure to do it ahead of time. It also doesn’t hurt to pull your own Equifax report to ensure everything is correct.
Select a Real Estate Agent, Mortgage Broker, Lawyer and Home Inspector in Advance
Your realtor, lawyer, mortgage broker, and home inspector are the people you’ll rely on when buying a home. Choosing a realtor who you connect with is a good first step. They’ll be able to offer referrals to the other team members but do your due diligence.
If you find a home you want to put an offer on, the process can move very fast. Having these professionals ready, sets you up for a smoother transaction.
What’s the Life Expectancy of the Appliances?
Consider the life expectancy of everything, not just your kitchen appliances. How much life remains on the furnace, roof, windows, and air conditioner?
At what age are these components going to need to be replaced? These are all big-ticket items that should be budgeted for accordingly. You never know when appliances will break down, so it’s a good idea to have an easily accessible emergency fund because you don’t want to be without them.