The winter buying season is slowly upon us. If you’rethinking of buying your first home now is a good time to start planning ahead. Agood place to start is by putting aside some money towards a downpayment.Ideally, you need a minimum of 5% down for a home. If you don’t have exactly 5%then there are cash-back mortgage options available. In addition to downpayment,banks like to see that you have 1.5% of the purchase price meaning closingcosts such as notary fees and welcome taxes.
With some downpayment in hand you are now ready to getpre-approved. In other words, a pre-approval will access your buying capacity.Often times clients are anxious to know their buying capacity. That’s normal butit’s important to look closer into those numbers. A good rule of thumb is toask yourself, are these mortgage payments (including heat, property taxes,insurance) reasonable and sustainable for me over the next 5 years or so? Moreoften than not, I see clients that come to see me after they have bought andthey find themselves over-extended with mortgage payments and personal debts. Second,the pre-approval process will help identify any trouble areas that can hinderyour ability to buy (such as bad or no credit) but often such areas can befixed. This can take time but get you eventually into a position to buy.
With pre-approval inhand, I suggest meeting with a real estate broker. From there the home shoppingprocess can begin with a good foundation.
If you have any specific questions you’d like to discuss innext week’s article please feel free to email me.
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