The process of purchasing a home can be very intimidating.  Buying your first home is a landmark event in your life and therefore deserves a good deal of preparation.  If you have always been a renter, you probably aren’t as familiar with the process of obtaining a home mortgage, nor are you aware of specifically what to expect as you being to search for your first home.  Being informed is the key to a smooth and successful home purchase without any curve balls coming your way.  The information included in this Post will help save you valuable time, money and stress.  An INFORMED buyer is a HAPPY buyer!


Why Should You Stop Paying Rent?  A home is an investment.  If you have always been a renter, think about that check you write every month, that is money that is gone forever!  That’s tens of thousands of dollars that you will never see again.  Its time for you to start making money off your money!  As you make improvements to the home, whether it is new lighting fixtures or window treatments?  That’s an investment that will increase the value of your home, instead of increasing the value of your landlords’ home. 


What If you’ve had Bad Credit? Don’t despair if the credit report is not stellar. Sure there are incidents that can’t be taken off the report but with knowing the background of your financial history, there are steps you can take to build your credit score.  Your first step will be to be sure all your bills are paid on time (late payments that are 30 days late or more have a negative effect on your credit rating). 

It’s in your best interest to contact a mortgage professional.  He or she will access and study your credit report and will help develop a plan of action to improve your score.  They may, for example, advise you to reduce the number of credit cards you carry, pay any outstanding tax liens, and reduce your credit limits on your existing accounts.  The corrections you make on your credit will allow you to qualify for a better interest rate!  Your mortgage professional will help you address problems showing up on the credit report.


How Much Money Do You Have To Come Up With To Buy A Home? The amount of cash you will need is dependant on each situation, and is heavily influenced by the cost of the house and type of financing you will get.  There are three areas you must have enough money to cover – Deposit money, down payment, and closings costs. 


How Do You Know If You Can Get A Loan?  There is a mortgage calculator on the Right hand side of this site or Click Here For Mortgage Calculator.  For more accurate information, your best option is to contact a mortgage professional.  They can initially pre-qualify you for a loan amount.  They will help you evaluate your loan potential.  This is a free service mortgage professionals provide before you start looking for a home.  You are under no obligation; this is simply for you to benefit from. 


In addition to the Mortgage payment, what other costs will I incur?  If you have always been a “renter” you may be used to your utilities being covered in your monthly rental payment, so paying your utilities may be new to you.  Often the seller can give you estimates on how much the utilities normally cost.  You’ll also have property taxes, normally these taxes are rolled into your mortgage payment, so check with your mortgage professional to confirm.


When You Find The Home You Want, How Much Should You Offer? This is when your real estate broker can help you the most.  Your Realtor will do a comparative analysis of similar homes in the neighborhood which are currently on the market, under contract, and those that have closed in the recent past.  They will usually give you a small range in which they see the home selling for.  Remember, this figure is a recommendation; the amount you offer is always up to you.  You need to take into consideration how much the mortgage will be, make sure you can really afford what you are offering.  How much you really want the home may also affect the price you offer.


What If Your Offer Isn’t Accepted? Well, Offers are very often rejected which doesn’t mean “game over.”  They often are! But don’t let that stop you. You may receive a “counter-offer” from the seller.  Now you begin negotiating.  Your broker will help you.   There are several terms in the contract that you can adjust in addition to the price to make your offer more appealing.  Often your Realtor might learn the seller has a specific date they are looking to close on or maybe they would like to see a slightly higher down payment.  You may have to offer more money, but you may ask the seller to make repairs that wouldn’t normally be expected. Often, negotiations go back and forth several times before a deal is made.


So What Will Happen At Closing? The closing will usually take place at either your attorney’s office, the seller’s attorney’s office, or in some cases the real estate brokers office.  The closing agent will have a large stack of papers for you and the seller to sign, he or she will give you an overview of each paper, and you may want to take the time to read each one or consult with your agent about what it is that you’re signing.  After that, the keys are yours and “welcome home”

If you would like more details on the contents of this report, don’t hesitate to contact me – Jarrod Armstrong at 416-494-7653, I am here for all of your real estate needs.  I’d be happy to set up a FREE consultation with you to help you achieve the dream of home ownership.

If you have an interest in Buying or Selling in the Toronto area and would like to discuss the current market, please fill out this contact form or call me directly at (416) 457-1722.


To search Homes or Condos currently for sale – click Search Toronto MLS Listings and contact me for up to date details and market analysis.