Guest post By Daniel Watson
Buying your first home is a big decision. The process can seem overwhelming. The steps below will point you to free resources and simple tips that can make the process a little less painful.
Start by finding out how much you can afford. You can use an online home ownership affordability calculator to determine an affordable monthly payment. After you enter the information about your income and your debts, the calculator will spit out a an estimated purchase price.
Mortgage lenders will pre-approve potential borrowers. The borrowers submit their financial information to the bank, who will then review the information, and determine the amount of money they are willing to lend. They will write a letter documenting this decision. The letter may contain other conditions, such as requiring the buyer to pay certain debts in full prior to obtaining a mortgage. If you need help in this area Kanetix.ca recently launched a platform where prospective home buyers can compare quotes from different providers and get pre-qualified online.
3. Making an Offer
Find a Realtor and look at houses. Communicate your dream for your house in terms of bedrooms, bathrooms and other requirements. Do not feel pressured to buy the first house that meets all the items on a checklist. Make an offer on the house you can see your family living in for years to come.
The offer will then be presented to the sellers. The conditions of sale, like the selling price, the closing date, and what fixtures and appliances are included may be negotiated before the contract is finalized. You will make a deposit when submitting your offer to show you are committed to the purchase. The money is credited to you at the time of closing.
After negotiations are complete, a contract has been created. During the next few weeks, the buyer will secure final mortgage approval. The approval is not truly final until closing, so buyers should not make any major purchases until after closing. Buying a car or appliances could impact your credit score, and ultimately the amount of money the bank will lend.
Closing is the final step. The papers are signed, the money changes hands and the keys are transferred to the buyer. For a more in-depth look at all the steps involved in the home buying process, check out The Buyers Series: What No One Told You.
Buying your first home does not have to be overwhelming. Find a reliable Realtor through doing research and asking for recommendations from friends. Talk to financial people you know. Trust your own instincts if something doesn’t seem right, and trust those same instincts when it does. Above all, enjoy the process. This is an exciting time!
This is a guest post by Daniel Watson, a journalism student at the University of Toronto who has a passion for real estate. His goal upon graduating is to educate and advise prospective home buyers through his writing to help make the decision process a little easier.
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