Navigating The Market As A First Time Buyer.
There is no doubt that buying your first home is an exhilarating experience. It is the start of a new chapter, a new found independence and a huge milestone, but it can also create a sense of fear and uncertainty. Today I want to break down the experience, touching on; choosing a realtor, navigating the offer process, understanding the complexities of mortgages, leveraging incentives and ultimately how to make the process seamless and enjoyable.
Knowledge is experience, consulting with a local Realtor ensures your best interests are taken care of and eliminates the stresses that coincide with entering into the market for the first time. You don’t have to fear missing out on expertise due to additional costs, in most cases the costs associated with a buyer's realtor are fronted by the selling party. You want someone that will foster a positive relationship, that keeps your best interests top of mind. Using a local industry professional can often eliminate the unknowns that come with someone that may not be familiar with the area. Take your time interviewing realtors and choose the best fit for you!
Real estate is a competitive market and it can often feel discouraging, keeping a competitive edge is very important in the negotiation phase of purchasing a home. Your Realtor will work with you to draft an offer that supports your needs whilst still being aggressive. If you know you are getting ready to enter the market, talk to a mortgage professional and obtain a pre-approval, which are valid for up to 90 days. A pre-approval will not only help you establish a budget but will provide peace of mind in knowing that you can acquire a mortgage.
Mortgages can seem complex if you haven’t had one and don’t understand the basics. I encourage you to consider this guideline for your down payment; 5% on $500’000 or less, 5% on the first $500’000 with 10% on the remaining balance up to $999’999, and 20% on $1,000,000 or more. A downpayment of less than 20% will often require Mortgage Loan Insurance which is set in place to protect the lender in the event that you are unable to make your payments. Consider variable vs fixed rates - variable rates fluctuate and change as the interest rates rise and drop, whereas fixed rates hold for the entirety of your term.
Nationwide there are a number of incentives that you as a first time buyer can leverage to benefit from and save money. As of April 16, 2024 RRSP withdrawals for FTHB to use towards a downpayment have been increased from $35,000 to $60,000. Things like the Land Transfer Tax Rebate and the First Time Home Buyer Tax Credit are ways that you may be able to earn some money back! Take the time to research and consult with professionals like your bank, financial advisor, mortgage lender, realtor and tax expert to ensure you are making an informed decision, after all this is a huge purchase and you deserve the best team!
