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5 Step Home Buying Guide

Deciding to purchase your first home, or making the decision to uproot your family to a new home, can be a daunting task. Luckily, this quick 5 step guide is the perfect resource to take you from wherever you may be to across the finish line.

  1. Determining Your Budget - This will take into consideration a number of factors such as your household savings, credit score, income and more. All in all, I recommend a minimum of a 25% downpayment and a mortgage payment that computes to 25% of your take-home-pay. In higher interest environments like the current one, the more money you can put down and the faster you can pay off your mortgage the better. Canadian banks will often lend up to a maximum of 40% of your gross monthly income also known as your Total Debt Service Ratio (TDS). Keep in mind, you have closing costs, utilities, services etc. The last thing you want is to over-stretch yourself, be a victim of "keeping up with the joneses" and purchase a home you struggle to afford.

  2. Get Pre-Approved For A Mortgage - Your local bank will have a mobile mortgage specialist to assist you or you can use another trusted source. The benefit of using your current bank is that they will already have your information on file. You will have to provide them with 2 years of your financial statements in order for them to determine the amount of home you can purchase. They will also be able to lock in the mortgage rate for 90-120 days which is a benefit if rate were to rise in the meantime.

  3. Hire a Real Estate Agent - Hire a trusted Realtor that is familiar with your desired region. Your Realtor will be like your quarterback, the central piece who can best direct you to your destination, the end-zone. They will help you navigate the market, recommend professionals (legal, broker etc.) find and show you suitable properties and negotiate the purchase price.

  4. Search & Find - Through a combination of listings your agent will send you, conducting your own search and attending open houses of homes that fit your criteria, you will find the ideal new home. Sometimes it's a feeling the home provides and other times it just checks off most of the boxes on your list. Through my years in the business I've come to know that their is no perfect home. Every property will require something to do or change or one missing element from your wish list. You will then sit down to discuss the offer with your realtor, review comparable sold properties in the market and incorporate any conditions, such as financing or a home inspection. Negotiations may go back and forth a few times. In some markets, you may be competing against other purchasers for the same home.

  5. Closing The Deal - Congratulations, your offer is accepted! A deposit (typically 5% of the purchase price) is required within 24 hours and then you go to work on satisfying any conditions on the offer. Once the conditions are waived/fulfilled you will have a firm deal. Inform your lender and lawyer of the sale so they can get to work on doing what they do best. They will each contact you to sign the mortgage documents and any legal paperwork prior to closing. On the closing day, your lender will provide the funds to your lawyer who will then transfer them to the seller's lawyer. Once that is done, the deed for the property will be transferred in your name and the keys will be released for you to enjoy life in your new home!

To begin your home home buying process, connect with Andrew Mizzoni through the "Realtor Connect" form.

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