FAQ: First Time Home Buyers & Real Estate Mortgages

 

When buying your first home, real estate can be pretty overwhelming. Where to get financing? How much financing will we need? Where should we live? What kind of house would be best for us? Do we go to Open Houses? How do we choose a Realtor?

We’ve gathered together some useful links and common mistakes for first time home buyers to help you make the best possible real estate decisions about your future home. If you have more questions, contact Steve Thomas to get the answers you need and a no-obligation interview. Whether you’re looking to buy a home in the greater Newmarket area or elsewhere in the GTA, Steve has the real estate expertise you’re looking for.

To start you off, here are some useful links when you are beginning the process of buying your first home:

CMHC: The Canadian Mortgage Housing Corporation. They offer mortgage insurance for lenders who are offering high-ratio mortgages – anything less than 20% down payment would require CMHC insurance. There may be other lenders who offer this real estate insurance, but CMHC has great information to get you going.

http://www.cmhc-schl.gc.ca/en/co/buho/index.cfm

Home Buyer’s Plan: A federal program that allows you to withdraw up to $25,000 per calendar year from your RRSP to use toward the purchase of your first home. This real estate loan will have to be re-paid over 15 years after a grace period.

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html

Financial Consumer Agency of Canada: A federal program to protect consumers and specifically Mortgage 101, a real estate introduction to buying your first home.

http://www.fcac-acfc.gc.ca/eng/consumers/mortgages/mort101/index-eng.asp

Common Mistakes Made When Buying Your First Home

Not Getting a Home Inspection

One of the big emotions that often drives home buyers (and sellers!) during a real estate negotiation is fear – and when you’re putting in an offer on a home that you’ve fallen in love with that fear can reach a fever pitch. In a competitive market, like we have here in the Newmarket-Aurora area, it can be tempting to waive the home inspection condition.

Unfortunately, it’s a decision that could haunt you for years and cost you tens of thousands of dollars, if not more. From structural irregularities to leaky basements and sketchy wiring, there are common real estate issues that a home inspector will catch.

Having an experienced Realtor to guide you in your real estate negotiation will help you make more rational decisions about your potential home – and their trained eye might very well catch issues during the walk-through that will cause you heartache later. For example, in Newmarket, we have a mix of new subdivisions and century buildings that all require a trained eye to spot potential issues.

One of Steve’s goals, especially when working with first time buyers, is to educate them about real estate as they visit houses and to train them to catch those maintenance issues that can make all the difference. Contact Steve today for your no-obligation interview and hear how he can help you find the home of your dreams.

Not Budgeting for Taxes, Insurance, Maintenance, Repairs, and Renos

Insufficient budgets have derailed first time buyers again and again. You have to ensure that you have enough room in your budget for the mortgage and for taxes, insurance, ongoing maintenance, repairs, and renos. Your home inspection can help you determine how much you’ll need for immediate repairs and renos.

Another area that needs to be budgeted for are the closing costs, typically 1.5-2.5% of the purchase price. These include the home inspection, legal fees, appraisal, land transfer tax, property tax, insurance, utility hook ups, and moving costs.

Buying a home costs more than just the cost of the home. You have to move your family from one location to another and you have to take care of taxes, utilities, and insurance. These costs can be significant and need to be budgeted for.

To see more common first-time home buying mistakes in our real estate market, click here.

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