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April 27, 2018
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May 14, 2018

Real Estate Buying First step? Finances.

The real estate industry has taught everyone one thing- there is a tremendous financial responsibility of purchasing a home. Here are my tips for dealing with the dollar signs so that you can take down that “for sale” sign on your new home. Don’t look at a single home until you know exactly what you can afford.

Get pre-approved.

Get pre-approved as a buyer and save yourself the grief of looking at houses that aren’t a realistic fit. This will put yourself in a better position to make a serious offer when you do find the right house. Unlike pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. By doing a thorough analysis of your actual spending power, you’ll be less likely to get in over your head. There is nothing worse than buyers fatigue!

Choose your mortgage carefully.

Used to be, the emphasis when it came to mortgages was on paying them off as soon as possible. Today, the debt the average person will accumulate due to credit cards, student loans, etc. means it’s better to opt for the 30-year mortgage instead of the 15-year. This way, you have a lower monthly payment, with the option of paying an additional principal when money is good. Additionally, when picking a mortgage, you usually have the option of paying additional points (a portion of the interest that you pay at closing) in exchange for a lower interest rate. If you plan to stay in the house for a long time—and given the current real estate market, you should—taking the points will save you money. It doesn’t matter how much you have, everyone can always use extra savings!

Do your homework before bidding.

Before you make an offer on a home, do some research on the sales trends of similar homes in the neighborhood with your agent. A good buyers agent, like yours truly, will carefully consider the recent local sales trends and make sure you’re putting your money in to the right nest. Most importantly, TRUST YOUR REALTOR! Don’t fall in to the rumour trap.  Just because you heard someone bought a home for a low ball price doesn’t mean that’s actually what happened (there is always more to the story!). Listen to your advocate and you’ll have a better chance at submitting that winning offer.

Good Luck!

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