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First Time Buyer

The purchase of a home is the single largest investment most families will undertake. If you are considering purchasing your first home, you may have noticed that it is easy to be confused about real estate terminology. To assist you, we have tried to make this website as informative as possible, and have included a section on frequently asked questions, to help you better understand the process.

The Ontario Real Estate Association (OREA) has developed some basic information to assist home buyers and a copy of this booklet can be sent to you if you complete the information below.

To provide you with the best background information, you should review the OREA booklet along with the information on Buy with Zero Down. Please also determine How Much Can I Borrow? and understand the 6 common mistakes as detailed below.

With this information in hand, you could then contact us and we would be pleased to meet with you to discuss your particular circumstances, or provide you with contacts to obtain a pre-approved mortgage.

It happens every day. First-time homebuyers, make costly mistakes during the home buying process.

Avoid these 6 common mistakes
made by many first time home buyers.

Mistake #1: Not planning ahead. As with most major endeavours, planning is key.  As soon as you begin considering purchasing a home, you need to start planning.  Buying a home is a time-consuming, demanding process, and your time-management skills are required to avoid early disappointments. One of your first steps involves your credit history and it is suggested that you contact the credit bureau and obtain a copy of your credit report.  Carefully examine it for errors, and ensure all details are correct before you talk to a lender.  If you are currently renting, determine if your lease has an early termination clause.  If there are penalties involved, you would need to take this in consideration and try to time your closing with the expiration of the lease and this will then determine when you begin your search.   During this planning phase, consider your life over the next five to seven years- do you plan to start a family? Will an in-law eventually move in with you? Will you be working from home? The number and layout of the rooms you require will depend on your needs in these areas. If you qualify for financing based on a dual income, will you be able to survive on one salary in order to fulfill a long-range plan, such as one parent staying home to raise a child? Once you've answered these questions, establish a plan.  Then direct the process with reference to the plan.  Don't let the process dictate to you.

Mistake #2: Failing to understand the home buying process. First-time homebuyers need not be embarrassed to ask questions, many questions.  It is therefore important to choose a real estate agent who has experience working with the uninitiated, is patient, and willing to explain the entire home buying process-from viewing homes to negotiating, financing, and closing.

Mistake #3: More House Than Can Afford. This occurs when homebuyers shop outside their budgets or over-extend themselves.  What can you do to avoid getting caught in these situations? Monitor your expenses for a couple of months.  Then, based on your findings, develop a budget that truly reflects your lifestyle.  Talk to a real estate agent who can provide insight into new home expenses and taxes.  Then revise your budget.  It's smart to ask your lender to pre-approve, rather than pre-qualify, you for a mortgage.  Pre-qualification only tells how much you can afford.  Pre-approval goes a step further.  Your lender will thoroughly evaluate your application-including verifying employment information and financial disposition-then clear you for a loan of a determined amount. Having your loan pre-approved gives you a sizeable advantage: Your new status as a cash buyer makes you more attractive to the seller.  Once you learn how much of a home you can afford, stay within your budget.  Just because you've been approved for a certain amount, doesn't mean you'll feel comfortable with monthly payments at the high end of the range.  Ask yourself if you can live with these payments. Do they fit your established budget?  If not, rethink your spending limit.  Your new home should give you great pleasure, not hold you hostage.  When you relay your price range to a real estate agent, ask to view properties within that range only.  By restricting yourself, you'll avoid disappointment later on.

Mistake #4:Being ruled by emotion only. Emotion is a crutical factor in choosing a home but, you must also be objective. Look at many homes, including an assortment of types of homes.  When you view a property, list the positives and the negatives.  Recruit a friend to view the home and provide you with objective feedback.  Also, think about how long you plan to own the house.  Would it be difficult to resell?  List the negatives.  Could you eliminate or reduce them?

Mistake #5:Buying into an unknown location. If you are not familiar with the area, ask your real estate agent for details. Don't stop your inspection at the property line.  Examine the surrounding area. Is it safe, well maintained and moderately quiet?  Is it convenient to work, schools and shops?   Ask about zoning and that lovely forest of vacant land across the street.  Could the highway nearby be widened in a couple of years?  If you're not familiar with the area, ask friends and colleagues about it. Have your agent assist you in your research.

Mistake #6: Signing before understanding the financing. First-time homebuyers have to contend with an assortment of mortgage types and the associated financial terminology.  Your real estate agent can be a great resource, unless you have the necessary financial background.  It is important that you shop around and compare.  When you decide on a lender (a bank, your credit union, or a mortgage lender) and a mortgage, get every detail in writing, in particular, the locked-in rate, fees, prepayment penalties,etc.  Try to negotiate a mortgage with no prepayment penalties.  This could save you about three month's interest if you have to sell your home and the mortgage is not assumable or portable. Before you begin to negotiate on your new purchase, ensure that you read all mortgage documents and have it reviewed by your lawyer.  Remember that you are signing a binding, legal document.  Make certain you understand the conditions of the loan.  Learn from the mistakes of others- it's the best way to ensure a smooth process with few surprises. 

 Please contact us if you would like to discuss in more detail or if you prefer, please complete the form below and indicate areas you would like to discuss, and dates and time that you would be available to meet.

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