Buying Your First Home: A No-Frills Guide

Purchasing your first home can be exciting, confusing, and overwhelming all at once! On the one hand, you're stoked to finally move a step closer to having a place of your own, but on the other, you're feeling intimidated by the entire process. Unfortunately, there's no way to completely veer away from the stress-inducing elements of buying a house. Still, breaking things down into more manageable steps can alleviate some of your worries. We've crafted this easy-to-follow guide to give you an overview of the different steps involved in securing your first home.

Determine Your Non-negotiables for a Property

We all have visions of what our dream home would look like, but we typically have to make some compromises based on our budgets and what's available on the market. Start by making a list of everything you want in a property in terms of location, nearby amenities, number of bedrooms, backyard space, etc. Once you've gathered all this information, streamline this list to separate your deal breakers from your negotiables.

Assess Your Credit Score 

Your credit score will play a significant role in how much money you'll be able to borrow and what kind of interest rates you'll face on your mortgage. The higher your credit score, the lower your interest will likely be. Credit card companies, banks, and credit reporting agencies can provide you with the details of your credit score. Though you don't have to have a perfect score to secure a mortgage, it can make things quite a bit easier and more economical. If your rating isn't looking too good and you have the time to hold off on buying a home, it could be worth taking some time to work on improving your record.

Choose a Realistic Budget and Price Range for Your Criteria

Once you've figured out your musts for a property and how much you can spend, it's time to set up a financial plan. Although no one wants to pay for somewhere priced at the top end of your budget, it's essential to be realistic about what your money can get you. That's not to say that you won't find somewhere that ticks all your boxes for less, but it's best to avoid becoming overly optimistic about your expectations to avoid disappointment. This is especially relevant if you aren't too familiar with the market at the time of buying.

Allow Some Wiggle Room for Unexpected Costs

Purchasing a house is the biggest financial decision most of us will ever make, which, as we all know, means that it doesn't come cheap. That said, there's much more to consider than the cost of the down payment and mortgage installments. These days, the added costs of homeownership can rack up quickly. Organizing legal documents, getting a home inspection, paying transfer taxes, and working with a real estate agent incur sizable fees. You might also need to account for the costs of moving expenses, new furniture, and property taxes.

Meet with Potential Lenders to Evaluate Your Mortgage Options

Before you commit to a particular lender, it's recommended that you shop around and compare the options available. Each bank or broker will likely bring something different to the table, and exploring the various avenues out there will ensure you find the most fitting mortgage for you. You'll also need to think about what type of mortgage you want, as both fixed and adjustable-rate mortgages have pros and cons. With the fixed-rate option, your interest rate stays the same for the duration of the loan, while the interest rates with adjustable mortgages can fluctuate.

Hire a Real Estate Agent

When you've been preapproved for a mortgage, it's time to start working with a real estate agent who can make the buying process substantially smoother. They'll help you find properties that fit your requirements while also navigating you through price negotiations and possible bidding wars. Finding an agent familiar with the area you're hoping to move into is crucial, as they can assist you in setting a pragmatic budget, ensuring your expectations are realistic for the market.

Discuss a Suitable Offer With Your Agent

Having a real estate agent's input when the time comes to submit an offer is invaluable. After you've viewed a property you love, we often don't want to give much thought to the negotiations that follow, but finding the right house is only half the battle! When coming up with an offer, you'll need to consider the asking price, proposals from other bidders, and whether you're willing to go higher if the initial amount is deemed too low. This can be complex and confusing, but your agent will guide you through it.

Carry out a Thorough Inspection

As much as you'll want to celebrate when an offer gets accepted, try to hold off until you've finalized all the extra steps! One of the most important things to do post-offer is to arrange a home inspection. At this point, you'll need to hire a professional to carry out a detailed assessment of the property. During this time, the assessor will examine everything from the structural integrity of the building to the plumbing and ventilation. It's not always compulsory, but following through with a deal without an inspection is incredibly risky. Depending on the outcome, you may need to discuss any repairs with the seller.

Close the Sale of the Property 

Before getting the keys, you must ensure your finances are in order, and the property inspection and repairs are up to standard. Now that you've gotten everything in order, it's time to finally close the deal on your home! 

All of the Must-Know Information You Need as a First-Time Buyer

Getting your foot on the property ladder is a huge achievement, even if it often takes a rather extensive process to make it there! It's easy to get caught up in all the challenges of budgeting, paperwork, and house-hunting, but try to focus on one step at a time to avoid burning out along the way.