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- Decide what you can afford. Generally,
you can afford a home equal in value to between two and three
times your gross income.
- Develop your home wish list. Then, prioritize
the features on your list.
- Select where you want to live. Compile
a list of three or four neighborhoods you’d like to
live in, taking into account items such as schools, recreational
facilities, area expansion plans, and safety.
- Start saving. Do you have enough money
saved to qualify for a mortgage and cover your down payment?
Ideally, you should have 20 percent of the purchase price
saved as a down payment. Also, don’t forget to factor
in closing costs. Closing costs — including taxes, attorney’s
fee, and transfer fees — average between 2 and 7 percent
of the home price.
- Get your credit in order. Obtain a copy
of your credit report to make sure it is accurate and to correct
any errors immediately. A credit report provides a history
of your credit, bad debts, and any late payments.
- Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different
loan options — such as 30-year or 15-year fixed mortgages
or ARMs — and decide what’s best for you.
- Get preapproved. Organize all the documentation
a lender will need to preapprove you for a loan. Items you
may need to include copies of at least one pay stub, account
numbers, copies of two to four months of bank notice of assessments
statements and T4’s.
- Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance
programs? Check with your state and local government on down
payment assistance programs for first-time buyers. Or, if
you have RRSP’s, you can use the money you’ve
saved to buy your fist home without paying a penalty for early
withdrawal.
- Calculate the costs of homeownership. This
should include property taxes, insurance, maintenance and
utilities, and condominium fees, if applicable.
- Contact a REALTOR®.
Find an experienced REALTOR® who can help guide you through
the process.
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