Buying a home is the biggest decision and investment of our life. Therefore, it is critical to prepare carefully every step of the process.
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Even if you do your homework well it is still possible to have the feeling that you could do things better. Perhaps, you could better evaluate and use all your alternatives such as your budget or mortgage options. In this way, you could be better prepared for your house hunting.
It would be a wise idea that every prospective homebuyer to learn from other homebuyers’ errors and mistakes. So if you believe you might be ready to buy a house then do your own research and learn as much as possible about this complex process.
Let’s see the top five issues that you should prepare extremely carefully before starting this process.
1| Be Thorough with Your Budget
How I mentioned above you need to prepare well every step. You should know that the homeownership status means much more than a down payment and a monthly mortgage payment.
There are many other costs and fees such as land transfer fees, property taxes, maintenance costs, etc.
Therefore, you need to know precisely how much you spend monthly on rent, car loan, other loans, insurance, groceries, maintenance, taxes, etc to know the total amount that you can afford.
2| A Bigger Down Payment will Save You Money
Between your down payment and the total amount you need to borrow is a simple mathematical relation. A bigger down payment implies a smaller amount of loan. In other words, the higher your down payment, the lower the total amount you need to borrow.
Although in Canada the minimum down payment is only five percent of a property’s value, it is recommended to have a larger down payment. In this way you can save a lot of money.
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3| You Should Buy Sooner
If you have decided to buy a house then take action as soon as possible. After all, why continue to pay rent when you can pay a mortgage. But however, this should be made wisely.
Still, in the long run it can be much better for you to wait. In this way, you can save up for a large down payment.
4| Get a Pre-Approved Mortgage
Pre-approval places you in a beneficial position when you start property searching because you will know how much you can afford, so you are able to make your offer when you find your dream house.
5| Make Your Mortgage Option Research
It is critical to choose the right mortgage for you. Perhaps, it is more important than choosing the right home..
Make sure you know all your option. Compare interest rates, terms, repayment schedules, etc. When you have all information, you can choose and pick the right mortgage for you.