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The top 10 things first-time home buyers should know before they start looking

January 21, 2015

Are you financially stable? Have you been working in the same industry for one year? Have you been self-employed for more than two years? Do you have some savings for your down payment?

Are you ready to shoulder the costs of home ownership? Remember that in addition to mortgage payments there are repairs, maintenance and unexpected costs. Do you have the time and money to devote to home maintenance? What if your furnace dies? How much is a typical water and sewer bill?

Determine how much you can afford to pay for a house. Add your debt payments to your household expenses. The Canadian Mortgage and Housing Corporation (CMHC) recommend your monthly housing costs should not exceed 32 per cent of your gross income.

Get a copy of your credit report through Equifax Canada Inc. or TransUnion. Before getting a mortgage, lenders will want to see how well you’ve paid past debts and bills. If you have no credit rating, start building one. Apply for a credit card with a good interest rate, make small purchases and pay the bill in full when it comes in.

Get pre-approved for a mortgage before shopping for one.

It’s a good idea to research mortgage terminology prior to meeting with a mortgage specialist so you understand commonly used words and phrases such as variable rates and amortization. Ask friends or family for help or go online.

Get a realtor based on a referral from a trusted friend or family member. The other option is to select a realtor who specializes in a certain area or type of real estate such as first-time home buyers or condos. If that’s not doable, take notice of the for sale signs in the neighbourhood you want to live. Whose name continues to pop up again and again?

Figure out where you want to live. Do you want to be near Go Transit, the QEW, schools or are you looking to live near restaurants and nightlife?

What kind of a house are you looking for? Know the difference between a stacked townhouse, a semi-detached house and a duplex. Bone up on the language of buying.

Speak to a lawyer. Know your closing costs. Get a quote from two or three lawyers on what fee they charge and what they bill for disbursements. Closing costs can also include land transfer tax, mortgage insurance and a home inspection. Allow 1.5 to 2 per cent of the purchase price for closing costs.

Rob Golfi is a sale representative for Remax Escarpment Realty Inc. He leads the Golfi team, an award-winning 10-member group of sales representatives who work collaboratively to bring clients exceptional results.

Rob Golfi of The Golfi Team is a Sales Representative with Remax Escarpment Realty Inc, your real estate expert servicing the Hamilton, Stoney Creek, Grimsby and surrounding areas. You can contact Rob at robgolfi@golfiteam.com

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