Tips for first-time homebuyers
Planning a vacation is a great metaphor for buying a home. Thoughtful planning, goal-setting, and preparation will let you step into the homebuying process with confidence – in the same way that a well-planned vacation lets you truly relax. There’s nothing quite as good as a little advice from someone who’s been where you’re going. That’s why Houseful is here to help make your first-time homebuying experience positive and successful in every way. With these tips for first-time homebuyers, you can know where you’re going and what you’re looking for, prepare financially, and do your research so you can enjoy the destination — without worrying about unwanted surprises.
The 5 best tips for first-time homebuyers
Whether you’re starting a family, looking for a bachelor pad to launch the next chapter, or helping your parents find a peaceful spot for retirement, buying a home is an important decision. Let these tips inform your decisions so you can find a home that fits you.
1. Focus before you fall in love
Establish your goals before you begin your search. It’s fun to start exploring and scrolling through homes, but pause to get focused and you’ll give yourself a much better chance at finding the right fit for you. Begin by sitting down and making a list of your non-negotiables, cost plans, and specifics like location, square footage, and outside space. Take some time to consider which of these are deal breakers, and which you could live without. Knowing your nice-to-haves and must-haves can help simplify decisions down the road.
When it comes to your home, you want to have a clear goal in mind. Create space for everyone involved in the initial planning process to share thoughts. If you have a partner or kids, consider allowing everyone to make their own lists and compare notes in a family meeting. This gives everyone a chance to contribute to the game plan.
Here are some tips for first-time homebuyers to consider in your initial planning:
- Looking for a place where you might want to raise kids? Think about yard space, safety, and how many bedrooms you’ll want years down the road.
- Rate your interest in various types of real estate: a townhouse with minimal upkeep, a bigger place in the country, or a spot that’s conveniently located close to transit.
- How might your plans change in five years? In 10 years? If you decide to move, is this a property well suited for tenants?
- Are you buying a place where you’ll be living your senior years? Consider comfort, access, and mobility.
When the excitement of bidding or seeing properties ramps up, having a list with your original vision will help you stay grounded and focused on what you really want. Come back to it when you’re making big decisions.
2. Know your budget and your limits
Before you find a potential home, be clear on the absolute maximum you’re willing to spend. Sticking to your budget can be hard when you’ve formed an emotional attachment or envisioned your future after seeing a property you love. Use your list from step one and prioritize features so you know what you’re willing to trade off, and think about where you might be able to cut corners.
For example, maybe you don’t need a big yard if your new home is near a park. Or perhaps you’re willing to pay a bit more to live near the local subway station because you’ll save on transit. Once you’ve set your budget, commit to it with everyone involved for a clear financial boundary you can keep.
Once you’ve set your budget, commit to it with everyone involved for a clear financial boundary you can keep.
3. Look for the loose threads and hidden costs
First-time homebuyers usually want to be careful and cover all their bases, but it’s easy to end up underprepared for surprise costs. Use our homebuying checklist to plan ahead, and feel confident in asking your agent or the Houseful team any questions that you have. Each question brings you one step closer to the right home for you.
- Don’t underestimate closing costs. It’s important to plan for costs like attorney’s fees, pest inspection, appraisal fees, and attorney fees. Put aside 2-5% of your total loan cost toward closing costs.
- When you’re committing to a mortgage, map out how the principal and interest payments will play out over the coming years, even if surprise layoffs or life events challenge your financial stability.
4. Do your research
If you’re here, we’re guessing that you’re the kind of homebuyer who does their research, so you’re already on the right path. Here are some ways to start out well prepared:
- Explore Canadian homebuying incentives.
- Get to know your mortgage options to find a plan that suits your financial needs.
- Explore the neighbourhood before you commit to an area. Go on a bike ride or a walk to get a sense of who your neighbours will be, how noisy it is, and what businesses or restaurants are nearby.
- Use tools like this Neighbourhood Explorer to get matched with neighbourhoods that match your home interests and needs.
- Take time to chat with friends who have real-life experience as first-time homebuyers. Ask them what they wish they knew and what they learned from their own experience.
5. Understand your mortgage options
Get to know the basics and nuances of applying for a mortgage and establishing the best financial plan for your needs. Here are some essential elements to consider:
- Start by getting pre-qualified to understand what you could afford. There’s no hard credit check, so it’s a good place to start when considering mortgage options.
- Plan and save for the down payment you’ll need to purchase your home.
- Figure out if you’ll need mortgage loan insurance.
- Use online mortgage tools to calculate, plan, and save.
- Work with a mortgage professional to explore different types of mortgages and choose the best one for you.
Houseful provides personalized guidance for your real estate journey. If you’re a first-time homebuyer, our dedicated team of experts offer support from initial planning through to moving day. Work with top-rated, local real estate agents and gain access to financial insights and advice from RBC Home Advisors.
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