by C21 Atria
on Monday, February 12th, 2018 at 5:40pm.
There are few purchases more exciting than your first home. New buyers are often enthusiastic about the many freedoms that come with being a homeowner, but buying a home is one of the biggest purchases you’re likely to make in your life, and it’s not one to be taken lightly.
Here are 5 Tips for First-Time Buyers in the Greater Toronto Area:
1. Hire a Greater Toronto Area Real Estate Agent
The Greater Toronto Area real estate market is full of quirks and nuances. A trained GTA real estate agent will help you find a home in a neighbourhood that best fits your budget and your needs. If you have a young family, you’ll likely be in search of a safe community where schools are nearby. If you’re a young professional, perhaps being near the heart of the city is your priority. Whatever your real estate goals are, one of the experts at Century 21 Atria will be eager to work with you.
A good agent will also:
Schedule home viewings
Advise on a home’s potential and value
Inform you about the local area
Negotiate a fair price for the home you want to buy
Navigate complex closing contracts
2. Seek Preapproval For A Mortgage
From the onset, it’s important to know your budget, and if you’re like 57% of Canadian home buyers that means that you’ll need a mortgage. Take a trip to your bank and inquire about mortgage preapproval. In order to apply for a mortgage, you will need to provide your mortgage broker with information about any debts you may have, any assets you may have, employment history, and your monthly income. If you are self-employed or paid by commission, you may need to look at the past few months in order to calculate your average earnings.
Once you know how much money your lender will be able to provide you with, you’ll be able to set an accurate budget and limit your search to homes that fit within your budget. Later, when it comes time to put an offer on a home, you’ll find that you’re more appealing to sellers because you’ve already proven that you have the proper finances in place. Mortgage preapproval also lends to a speedier closing process.
3. Calculate Your Budget
If you need to get a mortgage, following your home purchase, you’ll have monthly mortgage payments to make. Unlike car loans or smaller student loans, mortgages can take decades to pay off, and that’s why it’s important to take on a reasonable amount of debt that you’ll be able to pay off through both good times and bad. RBC suggests that a mortgage payment should be no more than 30% of a person’s monthly income. It’s also important to account for:
Monthly living expenses
4. Put Together A Large Down Payment
In today’s economy with prices ever rising, it can be difficult to save, but it’s important to put together as large of a down payment as you can feasibly manage. The larger your initial down payment is, the smaller the balance of your mortgage is. Over time, this means less money spent on interest. Additionally, if you’re down payment is more than 20% of your home value, you’ll be able to dodge paying monthly mortgage insurance fees in addition to your regular mortgage payment.
5. Differentiate Between Your Needs and Wants
In the early stages of your home search, it’s easy to make a long list of features you’d like to see in your home, but as you start to look at the price of homes for sale in Toronto, you’ll likely going to have to make some compromises. Start by making a list of needs. Some questions to consider might be:
How many bedrooms does my family need?
Do you work at home and need a home office or studio?
Do you need a large yard to accommodate pets?
Do you need to be close to a school?
Which spaces do you use the most in your current home?
By determining what features you actually need in a home, you can wisely invest your money in a space that will meet the needs of you and your family. Remember, later down the line, you can always renovate your home. It’s easy to replace tired outdated finishes with more modern ones. What isn’t easy to do is alter the structure of a building, so make sure that you’re happy with the overall floor plan of the building. Depending on whether a wall is load bearing or not, it may not be easy to remove it without compromising the structural integrity of the home.
Do you still have questions about purchasing your first home on the GTA real estate market? No problem. Contact one of the experts at Century 21 Atria. We’ll be happy to answer any questions you may have and walk you through every stage of the home buying process.
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