BUYING A HOME THE SMART WAY

If you are serious about purchasing a home, the first step is to get pre-approved. This not only tells the sellers and your Realtor that you are a serious buyer but it also tells you what your buying power is and what you will feel comfortable with for mortgage payments. You might not want to max out your mortgage. Keep in mind you will have other house expenses to consider such as taxes, repairs and monthly bills.

When you are shopping for mortgage lenders, there are several options for you including banks, credit unions and mortgage brokers. Banks and credit unions are limited with their own terms and interest rates. Mortgage brokers work with several types of lenders including banks, credit unions, mortgage companies, loan companies and trust companies. They have more options when it comes to interest rates and mortgage terms. When applying for a mortgage always read the fine print and understand your mortgage terms. Not every mortgage is the same.

Before getting pre-approved, your lender or mortgage broker will look at the following information:

Your assets

Your income

Your debt

And you will need to provide them with the following information:

Your identification

Proof of employment

Proof you can pay for the down payment

Proof you can pay for the closing costs

Information on assets such as a car, other property or boats

Information of debts such as credit card balances, and loans

After you get pre-approved it is time to sit down with your Realtor for a buyer’s consultation. In this consultation you will discuss the buying process, your time line to purchase your property and discuss your property requirements such as type of home, neighbourhood, price range, home needs and home wants. When searching for a home always consider using the home buyer triangle method.

Location – location should be based on where you work, your leisure area and where your kids go to school. Features -   should be based on your home needs and wants such as number of bedrooms, number of bathrooms, house square footage, lot size, finished basement ect. And Price- what is your budget? What are you comfortable with mortgage payments? Again you don’t want to max out your budget.

If you fall in love with the first home you see, it is important to view multiple homes so you can compare the pros and cons and have a better understanding of your options, your likes and dislikes.

If you come across a home that needs repairs, consider what you are willing to deal with and what you are not. Understand the costs of the repairs and understand your DIY limits.

When looking for a home, it is always wise to get a second opinion. Bring along a family member or a friend to help you house shop. A second or third set of eyes can point out things you might have missed or defects or issues with the house or neighbourhood.

Buying a home can be very stressful, and buying in a competitive market makes it even more so. It is important to keep your emotions in check. This is a business decision and you don’t want to end up over-looking any costly details or over paying for a home. You don’t want your emotions in the way, you want to remain level headed and make the right decisions.

Once you think you found the right home. It is time to check out the neighbourhood. Go for a walk. Go in every direction for a few blocks. How do the houses look? Do your neighbours keep up their yards? Are they taking pride in their property or are they run down? What are your neighbours age groups? Is it a family friendly neighbourhood or retirement age?  Maybe talk with a few neighbours to see if they enjoy the neighbourhood.

Also consider the proximity to work and schools. Checkout the routes to work, nearby schools and public transportation stops. Travel the routes yourself and see what they’re like, how busy are they and how long is your commute?

A small and important detail that shouldn’t be over looked is how much sun does the home get? Does is get sun in the backyard? Does the home get sun all day and become very hot? Or does the house not get much sun so it becomes dark inside? It’s a basic but important and will have an impact on how you enjoy and maintain your home.

Buy with confidence. If the sellers didn’t have a pre-inspection done. It is important for you to hire a home inspector. A home inspection gives the buyer a chance to review the home and make sure they are buying with confidence. If there’s something really wrong with the home, buyers can renegotiate the purchase price or cancel the deal.

Even though the home inspection can take up to 3 hours it is important to attend the entire inspection. This gives the buyer time to learn new invaluable information about the home, and experience the house for an extended period of time without interruptions.

And don’t sweat the small stuff. Hiring a home inspector means the inspector is looking out for the buyer’s financial interest. There might be a few cosmetic blemishes, such as a loose doorknob, or a worn light switch. These are cheap and easy fixes. What should be your focus are the very expensive repairs that aren’t obvious, such as structural problems or water damages. These are issues for you to decide to renegotiate or to walk away from the house.

Don’t be afraid to ask the home inspector questions. You hired a home inspector because he or she can evaluate whether this house has any issues that would make purchasing it a bad decision. If you don’t understand or something doesn’t look right, speak up. It’s better to ask a question now than have an issue arise after you’ve purchased the property.

Take appliance age into account. Appliances are some of the most expensive items in the home

If the appliance are greater than 10 years old, the replacement time is coming up. It is also important to make sure that the appliances you see will actually be staying with the house after you purchase the home. Some sellers can be sneaky and replace the appliances before possession takes place. It might be a good idea to take some photos of them.

Understand your house insurance. Mortgage companies require specific amounts of insurance to be carried by homeowners. They require insurance because a home is a very expensive thing to replace. Make sure when you talk with your insurance broker that you are fully covered so you don’t run into issues later on.