One of the most complicated adventures in life is buying a new home. It’s also one of the most rewarding experiences! If you’ve purchased a home before, you’re likely an expert on all the ins and outs. But if this process is new and confusing for you, our home buyers’ checklist includes important steps to take throughout the process. When buying a condo or home, here’s what you should consider.
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Financial Checklist
Save for the Down Payment
It can seem overwhelming and near impossible to save for the down payment of a house, but if you break the process down into smaller steps, you can accomplish this goal. First find out how much you need for the down payment. Then make a plan that will help you save up the money you need. This could include opening a savings account or investing your money to help grow your savings. A financial advisor from your bank can get you set up with good tips and the right savings accounts to build interest, so you can get the most out of your money.
Ensure You Have a Good Credit Score
It will be very difficult to get approved for a mortgage with bad credit. As part of your home buying checklist, take steps to increase your credit score. This means paying off any debts you may have and ensuring future bills are paid in full, on time each month. A higher credit score could help you get a lower interest rate on your mortgage.
Calculate How Much You Can Afford to Spend
It makes no sense to put a down payment on a home you cannot afford. If the monthly payments are out of your budget, it won’t matter how much you have saved up. There is a general rule that your monthly mortgage payments should not exceed 36% of your annual income. This rule measures your debt relative to your income, and lenders will use this model to evaluate whether or not you can afford a home.
Mortgage Checklist
Your Monthly Installments
There are many easy-to-use tools online that will help you calculate your monthly mortgage installments. Knowing this number will help you budget your expenses throughout the year. With these online tools, you simply input the price of the home you are interested in, and the down payment, and it will generate your monthly payment.
Choose the Best Mortgage
Once you know how much you can afford, you can then choose the best mortgage for you. You can choose a loan from a traditional lender like a bank or a private loan from an alternative lender. Shop around to see which lender can offer you the best interest rate. Next, decide whether a variable rate mortgage or fixed rate mortgage is best for your needs, as well as determine the length of the mortgage term, and the amortization period you want. All these factors will determine how much money you end up paying over the course of your mortgage.
Home Buying Checklist
Choose a Good Real Estate Agent
Finding a qualified realtor will help you navigate the challenging process of purchasing the right home. These experts handle all the details for you such as booking house showings, comparing the recent prices of similar homes in the neighbourhood, and helping you put in an offer on a home. They understand the ins and outs of the forms and procedures needed to purchase a home, such as the Agreement of Purchase and Sale, and can offer you valuable insight, so you don’t miss a beat.
Consider the Location and Neighbourhood
Location, location, location! The location of the home you choose will not only impact the cost of the house, but it will also make a difference in your daily commute. If you choose to live in a rural area, you may find that homes are more affordable. However, that may also mean commuting to work for an hour or more. Living downtown is usually more expensive, but you may not need a vehicle to get around, which could end up saving you money in the long run. If you have a family, choosing a neighbourhood with local schools, playgrounds, conservation parks, and other families may be your goal. As you compile a list of potential locations, list the pros and cons of each to find the one that is best for you.
Put in an Offer
Once you’ve found the house you want, ask your real estate agent to put in an offer. You can choose to make a conditional offer pending a home inspecting. If the seller accepts what you have offered, the house will be temporarily removed from the market under contract until it is either sold or the offer is retracted.
Get a Home Inspection
Before buying a home, it is a good idea to have it inspected. Home inspections are thorough to assess the condition of the house. You can hire a licensed home inspector to make sure there are no issues and that any repairs are completed before you make a final decision with the seller.
Final Negotiations
After getting the results of the home inspection and checking your finances, it’s time make a final offer. If you believe any price adjustments should be made, this is the time to address those points. If there are any repairs, these need to be handled before the agreement is closed.
Hire an Experienced Lawyer to Close Your Deal
One of the last steps before closing the deal is to hire an experienced real estate lawyer. The lawyer takes care of everything needed to legally transfer the title of the home, ensures the seller gets their funds from you and your mortgage lender, and handles all the paperwork that needs to be signed during the closing.
At Zinati Kay – Real Estate Lawyers, we can help you understand the terms of your mortgage and purchasing agreement, so nothing is left in the dark. With over 50 years of closing experience, we provide fixed closing costs to our clients when they buy, sell, mortgage, or title transfer their property. We have closed over 21,000 real estate transactions and have thousands of satisfied clients to prove it. If you want a professional to help you make wise decisions about your home purchase, contact us at (416) 321-8766 or e-mail us at info@zinatikay.com for more information about our services.