Thinking about taking the leap of buying your first home? Here is what you will need to know before jumping in.
Home buying is a process, one that requires some simple advance planning – the better prepared you are, the easier it will make the process run as smoothly as possible and ensure you come out successful. Most people think that the home buying process begins with attending open houses, browsing for homes on MLS or finding a real estate agent – but as you will see, these are actually the very last steps in the process. It all begins with finances and that should be your main focus before you even begin to think about homes. Below are a few tips to follow to begin your home buying process:
Begin with checking your financial budget by calculating your monthly expenses and income. Budgeting allows you to have a plan for your monthly spending. You will become more aware of your unnecessary purchases. It ensures you have money for your essential needs including a home. You could also revise your budget trimming out excessive expenses or take on extra work to earn more money.
Pay Down Any Debts
Do you carry outstanding debt, like a student loan, car loan or a balance on a credit card? The chance of qualifying for a mortgage for someone who cannot manage their debt is highly unlikely. This does not mean you have to be debt-free to buy a home, but it does mean that what you owe should be less than what you earn.
Start Saving for Down Payment
Almost every lender wants a buyer to have money in the bank – this translates into the equity you have in the home, which is determined by how much money you put towards your down payment.
In order to put money down, you must save money. Use any money you’ve already saved in your RRSP or any other savings account. Family is also another resource to tap into as they could be a source of a loan or a cash gift.
Build Up Your Credit Score
When it comes to borrowing money, credit is everything. Your credit score is the historical record of how responsible you’ve been as a credit consumer. This will be used to measure your creditworthiness. In order to obtain a strong credit score, it is as simple as regularly paying your bills. This means paying at least the minimum monthly payment for each credit card and personal loan where you have a balance. Consider every late payment as a strike against your credit rating. A low score can mean you might not be eligible for a mortgage and maybe penalized with a much higher mortgage rate if you qualify.
If you’re starting from scratch, consider applying for a prepaid credit card, then use it and pay it off each month. The trick is to not max-out the card but to use it on a consistent basis and always pay off the balance. When you’ve got a strong enough credit score, apply for another credit card. With two credit cards used and paid off in full every month, you will build up a strong credit score in no time. It’s all about showing how responsible you are with the credit.
Consult a Mortgage Professional
Book an appointment with one of our mortgage agents at Dominion Lending Centres NasaKasa. After assessing your mortgage financing requirement, we will ensure the entire mortgage process is smooth from start to finish. We have access to multiple lenders, products and best rates in the market.
Talk To A Real Estate Agent
Finally, you can consult a real estate agent to help you find the house of your dreams. A real estate agent isn’t always a necessity when it comes to buying a home, but he or she can be an invaluable resource for those who do choose to work with one. An agent understands the real estate market and can get access for homebuyers to the homes they want to see. As a result, this will save the homebuyer time and frustration. One of the best ways to choose a real estate agent is on the recommendation of friends or family members. If you cannot get any recommendations, choose a real estate agent that has a positive reputation.
Dominion Lending Centres Nasakasa
At Dominion Lending Centres NasaKasa we work with new homebuyers every day and can help you with every aspect of the mortgage process – call us at 905.997.7001 or email us firstname.lastname@example.org today to discuss your mortgage lending needs.