Buying your first home will be one of the biggest investments you’ll ever make. It marks the beginning of an important chapter in your life, and can be the key milestone that sets you up for the future. To ensure that everything goes smoothly, we want to guide you along with a few tips to lead you in the right direction:
First things first, apply for a pre-approved mortgage. They traditionally last for 60-90 days and will set your maximum mortgage amount and interest rates — meaning you can establish your budget before you start your search. Learn more about getting pre-approved for a mortgage.
Anticipate extra expenses
We won’t lie — moving is expensive, so get ahead of the curve by budgeting for expenses like moving, utility hookups and new appliances. Moving costs can fluctuate, but they average in the ballpark of $800 – $2,000. Utility service charges, such as electricity and telephone, will total between $150 and $250, but of course, utility charges vary depending on use.
Understanding closing fees
Things like land transfer taxes, title insurance, and legal expenses can add up fast. A good rule of thumb is to put aside 4% of your home’s price to account for these closing costs.
Consider the home buyers’ plan
The Federal Government’s Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $25,000 in a calendar year from your registered retirement savings plans (RRSPs) to buy a qualifying home for yourself, tax free, and gives you 15 years to pay it back.
Buy within your means
It’s harder to enjoy all that life has to offer if every dollar you make is going towards paying for your home. Yes, 5% is the minimum down payment, but putting more money down substantially reduces your costs. A small down payment leaves virtually no equity in your home, and if it’s less than 20%, mortgage loan insurance is traditionally required which leads to even more costs and at higher interest rates.
Don’t forget the glam!
Your first new home is often also your first chance to decorate your space the way you want! If you’re budgeting for some upgrades to your new home at the Minto Design Centre, there are plenty of ways you can furnish and glam up your new digs inexpensively! Follow these tips from the designer to create a space that encapsulates the fabulous person you are and ensure your first home is dressed to impress.