After many years saving up, my partner and I finally bought our first house this spring. Even with years of experience in the real estate market, I wanted to make sure we were prepared before taking this huge leap forward. There are so many tips out there for first time buyers, but here are a few that really helped us out through the process.
Get your pre-approval first – You may have a general idea of what your budget would be, but without talking to a mortgage specialist it’s still just a guess. While we still needed to get a mortgage commitment once we put in an offer, a pre-approval meant that there were no unpleasant surprises with what we could afford. It saved us a lot of unnecessary panic as we weren’t scrambling to get together all of our paperwork once we were on a deadline.
Plus, once we found an amazing place we were able to jump on it right away. This can put you ahead of a lot of other buyers and can make a difference if you end up in multiple offers like we did. Having an open dialogue with our mortgage broker and a solid understanding of our budget allowed us to shorten our financing condition and win the house.
Know difference between “must haves” and “nice to haves” – There are A LOT of things that would be in my dream house, from a huge kitchen island to a built in sound system. However, that doesn’t mean that everything on my ‘want’ list was realistic within our budget range.
We sat down together and made a list before going out to look at homes to decide on the basics. What were the MUST haves that were needed to even consider buying a certain house? Things like the number of bedrooms, yard space for entertaining, and commuting distance to our jobs are all difficult to change down the line and we wanted to make sure we could live comfortably for many years. We knew that our first house wouldn’t be perfect in every way, but that doesn’t mean we couldn’t make it into an amazing home once we moved in.
Using RRSP for down payment – If you’re planning on using your RRSPs towards your down payment make sure to account for extra time to deposit the funds into your account. We had to make an appointment at our bank and fill out paperwork in person in order to use them towards our down payment as a first time buyer. It can take a couple days for the funds to transfer, so don’t leave it to the last minute! The official deposit receipt and bank statements are part of the final documents your bank will need to verify that you have the agreed upon down payment for the house.
Improvement fund – Like most buyers, we knew we wanted to make a few tweaks to our new space once we moved in, from fresh paint colours to new curtains. All these small costs can add
up quickly, so we made sure to set aside extra funds to cover the updates we were planning on making after closing. I also kept an eye out for sales on paint and other home items to make our dollars stretch even further, and scoped out local yard sales and online buy & sells for furniture and décor items
Avoid HGTV envy –I know I’ve been guilty of this, after too many hours watching renovation shows it can seem like major projects are much simpler jobs than they actually are. Once you’ve moved into your new home, it’s easy to get carried away in all the excitement. Don’t forget that these are professionals, and of course that it’s been edited for time and good TV. A common tip is any project will cost twice as much and take twice as long as you think it would. We made a giant project list of everything we wanted to tackled, and then narrowed it down by priority. Don’t skip getting quotes beforehand for any big ticket items to avoid sticker shock once the bills come in.