4 Great Tips for Buying Your First Home

by | May 27, 2016 | Real Estate

Owning the roof over your head is a significant financial milestone. While it’s an incredibly thrilling thought, it’s the kind of decision that needs to be considered long and hard. Here are a few tips to help you as you go on the search to shop for and buy your dream home.

Your Credit Report Matters

Your credit report basically contains details of your credit history. It shows if you’ve ever defaulted on your payments, been late and how much debt you have. Banks and lending companies rely on these documents to get an idea if whether you’re a credit risk or not. The higher the risk, the higher the interest rate you’ll get. In some cases, a dismal credit history and low credit score can keep you from even getting the financial assistance you need. Very few banks would approve of your loan if you’ve got low credit scores.

It’s wise to set your sights on your credit report well in advance of buying your first home. Then, if there are errors, you have an opportunity to have them corrected and you’ll see where there might be opportunities for improvement. In fact, it’s wise to check your credit periodically and there are even subscription services that can provide email alerts as well as help you protect yourself from identity theft.

Getting Financing

The best way to avoid paying for more than you should is to save up. If you can buy your home in cash, that’s great. But few people have that kind of financial wherewithal. The next best thing, then, is to save up as much as you can for your down payment. That will reduce your mortgage bills and the number of years you’d have to pay for the loan interest and could improve your chances of getting financing approved.

While there are many financing options for home buying in Victoria and elsewhere, having greater than a 5% down payment can help you get financing.

Determine a Budget

CMHC (Canadian Mortgage and Housing Corporation) cites the importance of setting a budget. Do the math. Find out how much money you can spend on a home and consider whether or not you would qualify for CMHC mortgage insurance, a necessity if you have only a small down payment.  Many say it’s ideal to go for a home that’s about two and half more than your gross salary. If you’re still paying off a large credit card debt, have alimony payments, or are loaded down with student debt, you might either want to go for low-cost housing options or simply put off your dream for now—at least until you find yourself on solid financial footing once more.

It may make sense for you to get your foot on the property ladder with a starter home that leaves room in your budget, for instance.

Get Help from a Real Estate Agent

Real estate agents have insider knowledge of the market—they have a network of contacts on the best available properties in town, even before some of these homes hit the market. With their know-how and insights, you’ll find it easier to go from one step to another in the home buying process.

Keep these tips in mind when you finally decide you want to start investing in real estate in Victoria. And if you need assistance with real estate in Victoria, make sure to get in touch with a reliable real estate company to make things easier.

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