With mortgages in Calgary at low rates, many people are taking advantage and shopping for their first home. The home-buying process, although exciting, can be confusing for first time buyers. Because your home is one of the biggest investments you’ll probably make, having everything in order before you start house hunting is crucial.
A few things first time buyers should understand include:
Preapproval
Your first step in buying a home is getting preapproved for a loan. This will help you know how much you can afford to pay for your home and what your interest rate will be. To get preapproved for your loan, your lender will have you fill out a mortgage application. This will include information such as employment history, income, assets, and credit history. A lender who specializes in mortgages in Calgary can walk you through the process and answer any questions you may have.
Down payment
You will most likely be required to pay a certain amount as a down payment, usually a percentage of the home’s asking price. Traditionally, this is between 5 and 20 percent. Carefully consider the pros and cons of the down payment amount you choose to pay. A lower down payment means more money in your savings account, but it also means larger monthly payments. A larger down payment, on the other hand, means you will pay less in interest over the life of your loan, and your monthly payments will be lower.
Realtor
If this is your first time buying a home, a realtor will be indispensable. He or she will not only do the legwork of finding homes in your budget with the amenities you want, but will also help you negotiate the best possible price and explain your contracts to you if you have any questions. Your realtor will act as the go-between between you and the seller and will address any issues or problems that arise.
You may also want to consider hiring a real estate attorney as well. He or she will focus more on your legal rights as a buyer and will ensure your contract is fair and easily understood.
Home inspection
Don’t overlook the importance of the home inspection. Even if a home looks perfect, a home inspection will document any potential problems with the home’s structure; for example, you may think you are getting a great deal on a home only to find after the inspection that you will need to put an additional $20,000 into it to repair a roof or foundation. You can use the inspection to either negotiate a lower price or look for a new home altogether.
If you are purchasing a new home from a builder, you will do a walk-through as well. During the walk-through, make a note of anything that needs to be repaired before you sign the closing documents on your home. For example, a faucet that drips, a dent in the drywall, or a bad paint job are all things you can request be repaired by the builder before you sign on the home.
Purchasing your first home can be overwhelming, but being properly prepared can take the stress out of the process. Even though mortgages in Calgary are at low rates, be careful not to rush into the home buying process before taking these important steps into consideration.
