Theodore Lowe, Ap #867-859 Sit Rd, Azusa New York
Theodore Lowe, Ap #867-859 Sit Rd, Azusa New York
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Buying your first home is an exciting time in your life, from picking out your dream neighbourhood to finding a house in which you can see yourself happily living for years to come.
Once the excitement settles, what steps do you need to take to turn your dream into a reality?
What do you need to do to navigate through the process comfortably?
Today, we’ll take you through some of the most critical steps you’ll need to go through as a first-time homebuyer to help you along this exciting journey!
Before you start house shopping, you want to take an inventory of your savings, income and credit to help determine how much house you can afford. A simple mortgage affordability calculator can help you figure out the maximum house you can afford at your current income and credit situation.
You don’t want to overstretch finances by going for houses that might be challenging to keep up with the required mortgage payment.
Working with a real estate agent is not required; however, it’s highly recommended, especially for first-time homebuyers.
Expert advice and guidance are always necessary when venturing into something new, like buying your first home.
Trust me. You’ll have a lot of questions to ask. Your real estate agent is the right one to answer those questions.
In addition to giving advice, a real estate agent is likely to have a broad network of other professionals (house inspectors, mortgage insurers, mortgage brokers, and house appraisal agents) you need for a smooth house buying experience.
Once you’re pre-approved for a mortgage, your hunt for your first home begins!
You can look through real estate websites that show listings in your area to get started. These databases easily filter listings based on your budget, preferred neighbourhoods, and more.
You should also enlist the help of a real estate agent. They’ll be an expert in whatever market you’re looking for a home in, and the more they understand what you’re looking for, the better they’ll be able to help a first-time home buyer like yourself find what you’re looking for.
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Once all the work you and your real estate agent have done to search home pays off, it’s time to put in an offer.
As a first-time homebuyer, you may not know how much you should be offering, so you should rely on your agent’s expertise.
They’ll look at sales data and the property value of other homes in the area to help you come up with a reasonable price to offer for the house. They can also put together an offer letter and hand it over to the seller. Ensure to request a condition of financing (COF) which allows you to secure the mortgage before the purchase transaction goes through.
Condition of Financing is a clause of the House Purchase Agreement that states that the purchase transaction will not go through if you cannot secure mortgage financing for the agreed price within a specified time.
You will forfeit any deposit you have made if you cannot secure the mortgage financing within the period stipulated in the Purchase Agreement.
Congratulations if your offer gets accepted. It is time for a short celebration. Then comes the grunt of the process, the mortgage application process.
You will submit an official mortgage application to the lender, including your signed Purchase Agreement of the property.
The lender will do a detailed evaluation of your income, credit, down payment, and property.
Suppose your application checked all the boxes:
In that case, the lender will offer you conditional approval and issue you the Mortgage Commitment Letter.
This process can take two to five business days.
The seller might pressure you to waive the Condition of Financing, which we strongly advise against. It is a red flag if the seller wants you to waive the financing conditions before getting the official mortgage loan approval.
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An inspection will give you a better sense of the specifics regarding the house’s state. Your home inspector will test the plumbing, electrical, and HVAC systems, as well as the property’s walls, foundation, roof, and floors.
The home inspector will provide a report listing any issues found and their recommendations.
Learn More: The Ultimate DIY Home Inspection Checklist For Canadian Homeowners
If everything checks out after the home inspection and you’ve agreed to a price and terms with the seller, it’ll be time to close on your new home! At this stage, you’ll need to complete whatever paperwork is outstanding to finalize your mortgage and take ownership of your property.
As exciting as buying your first home, it’s not always straightforward for a first-time homebuyer. It’s essential that you follow the proper steps to ensure that everything goes smoothly and you’re not making a financial decision that’ll stray outside of what you can afford.
Just remember to do your research, and be thorough.
Don’t get discouraged if you can’t find what you’re looking for immediately. Buying a home can be a long process. It is a significant investment so make sure you go about it correctly!