A Guide to First Time Home Buyers in Canada

This article provides a focus on the most important advice to first-time home buyers to buy with confidence and without any surprising difficulties that may arise through mistakes.

Save for Down Payment and Closing Costs

The first step before shopping for a home is to save up enough money for a down payment. This is the amount of money you will pay as a deposit on your home. The larger the amount is, the easier it gets to get a mortgage. This makes it important to save as much as possible for the down payment.

It is suggested to save about 4% of the down payment to cover future closing costs with the estate agency. These usually incorporate legal and admin fees paid to close the real estate transaction.

Credit Score

A credit score is used by lenders to investigate the amount of risk they face in extending credit to a buyer. The lower a buyer’s credit score is, the fewer chances you have to receive a home loan. A buyer should check their credit score to see where they may fall short on the scale and improve their overall credit rating before applying.

Mortgage Pre-Approval

Having finances, savings, and credit scores in order, a buyer now needs to evaluate how much they can afford to spend on a home. There are many mortgage calculators online to use as an estimation. On these calculators, it is possible to factor in the amount of the down payment and repayment schedule. It is important to stick to a budget and not go overboard on selling prices.

Following these guidelines will ensure a positive buying experience.

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