In addition to our Buyer Checklist, if you are a new homebuyer, the below tips should help seal the best deal and mitigate stress while accomplishing this major life goal.
Aim for a 20 per cent down payment
Your down payment should be a 5 per cent minimum of the home’s value, but we recommend all first-time homebuyers to put down 20 per cent to secure a conventional mortgage. If you have money in your RRSPs, you can apply up to $25,000 towards your first home purchase.
Remember closing costs
These typically range between 1.5 to 3.5 per cent of the total cost of your home. You may be expected to pay for some, or all, of the following:
- inspection fee
- transfer tax
- transfer tax
- and fire insurance
Understand the different payment options
Your mortgage can be paid in a variety of ways, including weekly, bi-weekly, and monthly payment intervals. A shorter mortgage payment period will result in accruing less interest, while a longer amortization period will free up cash in your budget with fewer regular payments.
Depending on the mortgage, you may be able to pay extra lump sums or skip a payment. Assess what options and terms you are most comfortable with.
Depending on how other expenses, fees and taxes have affected your budget, you may need to decide on how much you will pay for your furniture. (I had this originally written as “buying new vs. used” furniture, but figure homebuyers in the areas Jordan specializes in would likely buy new anyhow)
Buy with your budget
Buying a house is the biggest purchase of your life. Succumbing to your emotions and impulses might result in paying more for your home eventually and possibly even never recuperating your losses.
Ignore buyer’s remorse
As with many major life choices, once you have found what works for you, stop searching. Instead of seeing possible imperfections, focus your energy on constructing a positive space of your own.