Is The Home Money Guide Real
The price of the home you want to insure must be within the loan limit for an FHA home in its location. The FHA doesn't lend money to people. It insures mortgage loans from FHA-approved lenders against default. To apply for an FHA-insured loan, you will need to use an FHA-approved lender. Search for an FHA-approved lender here. Step #1 — List of Supplies. Before embarking on your final walk-through, make sure you have enough time to be thorough. On average, this will take approximately 30-60 minutes for all the items you need. This includes the following: Contract of Sale – for a guide to use as a reference.
Summary: Home Buyer Guide
Ready to buy your first house? Real Estate is so much more than showings. Get yourself prepared for one of life’s biggest transactions by reading this comprehensive home buyer guide.
Where to get started?
Buying your first home should be an exciting experience! However, before you start spending your Sunday’s at open houses and scrolling realtor.ca, there are crucial steps that you need to take.
Reach out to a mortgage broker or a bank to determine the amount a lender will allow you to borrow for a mortgage (i.e. how much you can afford?). A common misconception with first-time buyers is not understanding what it means to be pre-approved. There is a huge difference between Googling “how much can I afford for a house?” and meeting with a registered lenders office. Use the Modern Money Affordability Calculator to gain a solid understanding of your possible maximum mortgage amount prior to your meetings with your potential lenders.
When you meet with a mortgage broker or bank, they will review things like your proof of income, assets & debts to determine the mortgage amount that you are approved for.
Now that I’m pre-approved, how much can I really afford?
It’s important to remember that there are other costs when owning and buying a home. I always advise my first-time home buyers to make a detailed budget to ensure that they are comfortable with the number they are putting down on an offer to purchase, and to ensure that they are able to make their month-to-month mortgage payments.
Here are some fees to remember when preparing to buy:
- Closing costs (one-time fee)
- Approximately 2% of the total purchase price you buy for (i.e. purchase for $315,000 budget for $6,300 in closing costs)
- Includes lawyer fees, title insurance & land transfer tax
- This is paid to your lawyer’s office when you meet with them, so you need to ensure that you have the funds available prior to the possession date
- Home insurance
- Utilities
- Groceries
It’s very common for first-time home buyers to start shopping and realize that the price they are looking at will put too much pressure on them financially each month. It may seem obvious but understanding that your monthly payments are not solely your mortgage payment, is crucial to answering the following question. How much can I really afford?
Showings
Now the fun starts! You’re ready to start working with a licensed realtor and get shopping. I always suggest to first-time buyers to ensure that they start by looking at a few homes at the low end of their budget, middle of their budget and high end of their budget.
Recognizing what you can get for your money will help you make informed decisions when you find the house that you are ready to try and buy. Taking notes and managing expectations is the biggest part of buying your first home.
Every buyer wants the perfect house in the perfect location for the perfect price, however, finding that so called “diamond in the rough” can be harder than you think. It’s important to manage your expectations and write down your “must have’s” and your “things that you can live without”. Always remember that the list price on a house doesn’t always reflect the sale price of the house.
Track the homes you like and see the difference between list price versus the sale price (i.e. the house you love is listed at $299,900 but actually sells for $325,000 and therefore could be out of your budget).
Make sure that when you are working with your licensed Realtor that you ask questions! Buying a house will most likely be one of the largest transactions of your life, so the more knowledge you have when buying the better.
Offer to purchase process
You’ve found the house! Now it’s time to put pen to paper and write an offer to purchase. It’s important to remember that buying your first house is a learning process. For most of us, this is the first-time sitting down to sign a bunch of legal documents. Make sure to take your time, ask your Realtor questions and understand what you are signing!
Here are a few important parts of a residential offer to purchase contract:
- Deposit
- A deposit in an offer to purchase is essentially a showing of good faith to the seller’s
- Very important to remember, your deposit forms part of your down payment
- Down Payment
- Ensure you know what percentage of down payment you are planning on putting down
- The minimum for a first-time home buyer is a 5% down payment
- Total purchase price
- The total price you are paying for the house
- Remember that the list price versus the sale price can differ depending on quality of the house and competition
- Possession Date
- When you would like to take possession of your new house
- Conditions
- Conditions are factors that you, as the buyer, need to have completed in order to be satisfied with the purchase of the home
- The two most common conditions are
- Home inspection
- Financing condition (Lender ensures that you are approved for the mortgage based on purchase price & the value of the purchased home)
Your Realtor will submit your signed offer to purchase and, with a little luck and maybe some more negotiating, will secure your first home!
(Note that if you have written conditions, you must satisfy those conditions before the deal is finalized. If, for some reason, you are unable to satisfy those conditions, your deposit will be returned)
Possession day
You have your keys and possession day has finally come! Make sure to take your time and walk through the home to ensure that all agreed goods & chattels (appliances, furnace, AC, etc.) are in working order. It is very important to let your Realtor know on the date of possession if something is broken or not functioning like it was when you bought your home.
Buying your first home is a lot of work but should be an enjoyable experience (hopefully now more familiar with what to expect after reading this home buyer guide). Take your time, do your research and get ready to build equity through home ownership.
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Is The Home Money Guide Real Estate
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