Whether you’re looking to purchase your first home or your fifth, we recommend following the below tips to ensure a quick and easy home buying process:
1. Improve Your Financial Situation
If applicable, begin the home buying process by addressing your current debt load. By paying off your high-interest debts, especially, you’ll be able to boost your finances and your credit score – ultimately improving your chances of getting the home you want at a great interest rate.
2. Save Your Down Payment
Reducing your debt load allows you to free up funds to put towards your down payment and closing costs (more on that below). Keep in mind, to purchase a home in Canada, you will be required to put down a minimum of 5% on the home’s overall purchase price.
3. Find Out How Much Home You Can Afford
Avoid spending outside your means (and potential disappointment) by calculating how much you can afford before you head out house hunting. Remember, too, that in addition to your initial down payment, your monthly mortgage costs should account for no more than 39% of your gross monthly income. Be sure to find out how much you can afford with the help of a mortgage affordability calculator.
4. Be Ready for Closing Costs
When it comes time to seek a mortgage pre-approval, your lender will expect to see you’ve saved both your down payment AND the additional funds needed to cover closing costs. Typically ranging from 1.5 to 4% of the home’s overall purchase price, closing costs cover sale-related fees such as home inspections, lawyer fees, land transfer tax and more.
5. Partner With an Expert Edmonton REALTOR®
The next thing you’ll want to do is seek the expert help and guidance of a qualified Edmonton REALTOR®. Not only will they help you navigate the home buying process from start to finish, but they’ll also help you zero-in on the perfect home in the ideal neighbourhood, negotiate with sellers on your behalf (ensuring you get the best deal) and much more.
6. Decide on a Lender
Now that your finances, down payment and closing costs are in order, it’s time to seek a mortgage pre-approval from a lender. We recommend talking to your agent beforehand, as they will be able to refer you to a qualified mortgage broker ahead of time (if you don’t already have your own). From here, your broker will work hard to ensure you get a great mortgage product at an even better rate.
7. Get Pre-Approved
Your broker will help you zero-in on the right lender to meet your unique needs. From here, the lender will review your current financial situation and, if qualified, issue a letter that guarantees they’ll approve you for a specific mortgage amount (at a locked-in interest rate) for a period of 60 – 120 days.
Note: It’s important to get pre-approved before looking for your new home as it will help you be taken more seriously by sellers and keep you from looking at homes outside your price range.
8. Find Your Dream Home!
Now comes the fun part. With pre-approval in hand, you can now head out in search of your dream home confidently and worry-free – all the while knowing your REALTOR® will help you find a property you love at a price you can afford. Happy hunting!