While searching for homes for sale, it’s essential to do your research and list what is most important for you. Since shopping for your first home in Mississauga and the GTA is an overwhelming process, we’ve put together seven tips you should put into practice when preparing to buy your first dream home.
1. Get your personal finances in order
Owning a house is costly. With mandatory monthly bills, property taxes, and home maintenance to pay, you will need to get your finances to buy a home.
Here is what you need to do to get ‘financially healthy’ and ready to buy your first home:
- Pay off debts with credit cards and bank loans. The goal is to be debt-free.
- By paying off your debts, your credit score will improve. Your credit score must be well above the 700 point mark to get a mortgage. If your credit score is in the 600 – 700 range, you can still apply for a mortgage, but prepare to pay a higher interest rate. Keep in mind, the higher your credit score, the easier it will be to get approved for a mortgage at a lower rate.
- Have an emergency fund in the form of a savings account and contribute to it monthly. Here is an example of contributing to a savings account. If you donate $200 a month to a savings account in one year, you will have saved $2400. This emergency fund will be useful when any emergency repairs or mandatory up-keep of your house might come up.
The goal of paying off your debts and saving money is that you will have to put down 5 to 20 percent of the house’s price as a down payment.
2. Do your research on the real estate market
The real estate market fluctuates all the time. That’s why it’s essential to do your research on the local area you are looking to buy. If you’re open to shopping for homes in neighbouring areas, you should also monitor the condition of those housing markets, as well.
You would be surprised at the price difference you can get by buying a house on the Mississauga and Milton border. Be sure to research areas in Milton that are close to Mississauga as a second option.
The goal of your research is to learn how long the houses in your ideal neighbourhoods stay on the market and their price range. Note down which months and the total amounts of any significant changes in the sale price.
3. Get a pre-approved mortgage
While paying off your debts and doing your research on the local real estate market you’re interested in buying in, be proactive and apply for a pre-approved mortgage.
With a pre-approved mortgage, you will able to:
- Get an estimate of the maximum amount of a mortgage a lender can give you.
- Estimate your monthly mortgage payments.
- Get quotes of possible interest rates for 60 to 120 days, depending on the lender.
- Prepare for applying for a pre-approved mortgage. You will need to give the lender information about your current debts and assets.
If you would like help applying for a pre-approved mortgage, a local realtor can guide you through the process.
4. Save for a down-payment
Along with paying off your debts and saving an emergency fund, it’s essential to save money for a down payment. Let’s give an example of how much is expected for a down-payment. Most lenders expect you to pay 5 to 20 percent of the asking price for the house. If the house is $500,000, 5 percent is $25,000, 10 percent is $50,000, 15% is 75,000 and 20 percent is $100,000.
5. Make your wish list of priorities
Once you have determined the price range you can afford for your first home, make a wish list of priorities. This wish list is important because while you are shopping for a new house, you will fall in love with different properties, and it’s easy to lose sight of what you are looking for. Here is a list of priorities you should write down:
- List down the main intersections in the neighbourhoods you want to live.
- How busy and noisy the area is
- Vicinity to schools, parks, and community centres.
- Distance to entertainment complexes such as sports arenas, movie theatres, museums.
- Distance to major highways and locations.
- Amenities you depend on, for example, nearby plazas, restaurants, shopping centres, gyms, and hospitals.
- Off-street parking or garage.
- Outdoor living space such as a porch and backyard.
- A solid foundation, roof, and gutters.
- The windows and natural lighting.
- Closet space and how much storage space you will need.
- The condition of the plumbing and electrical systems.
- The number of bedrooms and bathrooms.
- Research on the neighbourhoods you are interested in and the occurrences of burglaries and car thefts.
Once you have made your list of priorities, be sure to take them with you while looking at homes. While you’re at a viewing, make notes beside each item to ensure that the property meets your needs.
6. Attend open houses
Once you have listed your priorities, it’s time to attend some open houses. The best thing about going to open houses is that they let you learn more about the neighbourhood and gives you an idea of how day-to-day life will be if you decide to purchase that house in your preferred area.
Attending to open houses can help you decide if you want to branch out and check out other neighbourhoods. After factoring in the availability of amenities and schools, you might change your mind and start looking elsewhere, which is perfectly normal during house hunting.
At sMp Mortgages, we have an expert staff of mortgage agents with over 50 years of experience specializing in helping first home buyers in Mississauga and the GTA find their dream home. We take the time to listen to your needs and guide you through the process of buying your first home by giving you expert advice and offering you multiple services to cater to your specific housing needs.
If you would like more information on buying your first home, call sMp Mortgages at 1-844-MY-PLAN (1-855-915-5139) or contact us here.