Buying a home is the single most important financial decision you will make in your life. For this reason, you should not do it in a hurry. Instead, if possible, start the process several months before you will actually be buying the home.
Are You Ready? Although there are many good reasons for owning your own home, including the ability to create a living environment that you love and the advantages of building equity as you pay a mortgage, committing yourself to mortgage payments is a big step. Before you make this commitment ask yourself:
Will you be able to stay in the home for at least three to five years?
Do you have a 20 percent down payment?
Do you have a reserve fund of at least $10,000 to $20,000 for repairs and maintenance?
Are you free of credit card debt?
Do you have a stable job and at least six months of expenses in savings in case you lose your job?
If your answers to these questions are mainly positive, you are ready to buy a home, but if they are mainly negative, you might be better off renting until you improve your financial situation.
Get Pre Approved Your first step in the actual home-buying process is getting pre approved for a mortgage. Your most convenient mortgage source is often your current bank, as you already have a strong relationship with them, but you should also shop around in case other companies offer better mortgage rates. Preapproval has two main benefits. First, it gives you a good sense of the size of mortgage for which you qualify, so that you can limit your house search to homes you can afford. Second, it allows you to move quickly to obtain a mortgage and close on homes, something especially important in fast-moving markets such as Calgary, Toronto, or Vancouver.
Find an Agent Since agent commissions are paid by the seller, there is no downside to working with an agent and many positives. Search for an agent who specializes in the neighborhood in which you intend to buy. Interview a few agents until you find one who understands your needs, is responsive to your inquiries, and is certified as a REALTOR by the Canadian Real Estate Association.
Research Homes Your first step in researching homes is searching the web. Narrow down your choice of locations to ones that are convenient to work and schools, have homes within your price range, and have the sort of character you prefer. If your heart is set on being close to downtown nightlife and shopping, you won't be happy with suburban bedroom communities, but if you want a big backyard for a growing family, a small urban condo won't fit your lifestyle. Once you have narrowed down your search via the web, visit homes until you find one you like and can afford.
Make an Offer When you find the right home, you and your agent will prepare an offer. The offer is usually contingent on your finding financing and having a home inspector check over the house for defects. The seller will usually counteroffer and your agent handle the negotiation process until you and the seller reach an agreement.
Buy the House Once you and the seller have agreed on the price of the house, you close on the house at a meeting, where you and the seller complete the necessary paperwork to pay for the house and transfer ownership.
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