10 Tips for New Home Buyers
Home buying Tips for First time buyers
The home buying experience can be scary, especially for first time home buyers. Still, buying a home is one of the most rewarding things you can do. Especially if you’re buying in Ottawa, a stellar location between Toronto and Montreal, and just north of the U.S.
It’s essential to have a handle on the process so you’re prepared for what becoming a first-time homeowner is all about. Here are ten tips for new home buyers in Ottawa:
Make a needs vs wants list
Check out home buying incentives
Get help from friends and family
1. Know What You Can Afford
When it comes to buying your home, you want to concentrate on what you can afford. Your home should also be able to meet your needs. So, don’t get distracted by the fancy glamour and shiny features. Your home shouldn’t break your budget; Nice-to-have features are great, but you might need the third bedroom more than the granite countertops. This is where a needs vs wants list can come in handy!
Needs list:
Big back yard
Three Bedrooms
Two Bathrooms
Wants list:
Updated Kitchen
Finished Basement
Back yard with deck and pool
2. Stick to Your Budget
Once you’ve been approved and you know the price you can afford, stick with that, and don’t go beyond that. That may mean having to settle for something a little less glamorous than you envisioned. Consider what your needs are. Consider local schools, commuting time, the reality of the market, etc., to find the perfect home that fits your budget.
3. Plan for a 20% Down Payment
Anything less than 20% down payment will set you up to pay for private mortgage insurance or PMI along with your mortgage. That insurance protects the bank if you fail to make your mortgage payments. The higher your down payment, the less you owe on the back end.
Saving up 20% of a home’s purchase price as a down payment is the general recommendation – but it’s only a suggestion! If saving 20% isn’t feasible, work with your lender to create a payment plan that suits your needs.
4. Use First-Time Home Buyer Incentives
If this is your first home purchase, be sure to learn as much as you can about existing federal government programs for first-time homebuyers for Canadians. There are several options out there: The Home Buyer’s Plan, The Home Buyer’s Amount, First-Time Home Buyer Incentive, and the GST/HST New Housing Rebate.
Compare the benefits of each plan and understand how to pay it back
Some plans require 5% downpayment which is easier for first time homebuyers
If necessary, create a plan with your lender to increase your credit score
Have Questions?
Buying a home for the first time can be stressful and confusing, but we’re here to help!
5. Lock in a Fixed Mortgage Rate
Make sure to evaluate all the mortgage options available to you, including early payout penalties, but most importantly, be sure to lock in a fixed-rate mortgage. That means, no matter how many years your loan term is, your payment will always be the same. Conventional fixed-rate mortgages help you manage your household budget, which you will find a huge advantage considering all the other costs you will have along the way.
6. Don't Pass on the Inspection
This is great advice in a balanced market, but even in a seller’s market, you can try to get one in before you submit an offer. Even if the home looks brand spanking new, doesn’t mean you shouldn’t be taking a really close look. A trained, professional home inspector will check for the quality, safety, and overall condition of the entire house. A home inspection could save you tons of money down the road. Check out our blog post on home inspections to find out what to look for during the inspection process.
Ask your agent if they work with any inspectors
Go over any paper work and disclosures with your agent
Find out what the inspector looks for before making an agreement
7. Make an Offer
When you find the house you love and it fits your budget, make an offer. In a competitive market, even when there may be more than just your own offer going in, don’t hesitate, you never know how it can turn out. You can only win if you try.
Work with your agent to make sure they are getting you the best offer
Be ready to negotiate with the sellers
8. Be Willing to Walk Away
Unless you’re planning to purchase a home for a short period, less than five years, be ready to walk away from a deal. If the sellers refuse to accept your offer or the home inspection doesn’t meet your standards, it’s okay to walk away. Hold fast to what you’re looking for, especially if you plan to be in the home for years to come.
9. Maintain Reserves
Home buying can bring with it lots of expenses. For new home buyers, this can be a culture shock. Try to keep several months of living expenses on reserve in the event of illness, unexpected expenses, or job loss. That will alleviate the additional stress of keeping up with monthly payments and buy you time to get back on track.
10. Ask for Help Along the Way
As a new home buyer, you’re bound to have questions along the way. When you do, we’re just a phone call away. If you’re looking for a home in Ottawa, don’t hesitate to give us a call. We know you’re faced with hundreds of decisions. Peter & Sharon Bare Realty Group is your dedicated realty team here for everything you need.
Ask family and friends about their home buying experience
Do your research
Have fun! Home buying is an exciting time, don't let it stress you out to much.
Celebrate! You now own your new home!
Have any questions?
The home buying process can be confusing and stressful, but we’re here to help!
Contact us if you need any support throughout the home buying process, we’re a hands-on, full-service realty team for Carleton Place and West Ottawa area. This checklist is a great foundation, but nothing can replace an experienced realtor.
