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If you’re thinking about buying your first home in the near future, you may have a few questions about what you can expect from the process.
As a long-serving real estate team with decades of experience, here’s a look at some of the most common questions we hear from first-time home buyers.
If you find this post helpful, check back for part two in the future.
Note: This post is intended to provide basic high-level information for home buyers in Ottawa. For the best advice and guidance, always speak to an agent directly. We’d be happy to answer any questions you may have. Contact us.
How Do I Know What I Can Afford in Today’s Market?
The first step to understanding what you can afford in today’s market is to get pre-approved for a mortgage. During this step, a lender will closely inspect your personal finances and decide based
on your income, debt, and other factors, what mortgage payments you could reasonably afford,
and in turn how much money they are willing to lend you. After getting pre-approved you’ll have a more complete picture of your home budget and from there you can establish a wishlist for must-have items to keep front of mind during your home search.
How Much Savings Do I Need to Make a Down Payment?
Determining how much money you will need at a minimum for your down payment ultimately comes down to the price of the property. For first-time buyers in today’s market, housing affordability is mostly based on your income, savings, and debt. Once you have your mortgage approval from your lender, you may decide on a purchase range that is most comfortable for you based on what you can expect monthly mortgage payments to be. With your comfortable purchase range determined, you will be able to decide on a down payment amount which is typically a minimum of 5% of the purchase price for a residential property that you will inhabit yourself, however, your mortgage approval may require a higher percentage.
Where Do I Get a Mortgage?
As a home buyer, you will have a few options to consider when finding a lender. Some buyers will choose to work with their existing bank, while others seek help from a professional mortgage broker.
If you’re unsure where to get started with finding the right mortgage, ask your real estate agent. As an industry insider, they can connect you with trustworthy local lenders who are suited to help you.
Should I Work With a Real Estate Agent?
Absolutely! Partnering with an experienced local real estate agent makes it much easier to find your dream home. Beginning with an in-depth buyer consultation, your Realtor® will help you establish what you need from your first home. You will discuss your ideal communities and neighbourhoods, home specifications such as the number of bedrooms and bathrooms, and any other personal goals that may be important to your home search. After that, they can help you accomplish your dreams by guiding you to the perfect property.
Want to learn more about how the Wright Team helps buyers? Click here.
Getting ready to buy your first home? Check out these pages from our site for an idea of what you can expect throughout your buying journey.
What Are the Unexpected Costs of Buying a Home?
Along with saving up for your down payment, there will be additional costs that come with your home purchase. Before you begin your buying journey, it is important to be prepared for all the expenses that will arise.
One of the main costs that will apply to your home purchase is land transfer tax. This applies to all home buyers in Ontario, however, first-time buyers are eligible for a small rebate. Land transfer tax is calculated on a sliding scale, and there are online calculators that can help you assess this cost.
Part of the closing process involves working with a real estate lawyer. With this in mind, you’ll also want to budget for applicable legal fees.
Based on the conditions of your mortgage, you may also be required to obtain a specific type of insurance such as title insurance or mortgage insurance, and of course, you will need to budget for home insurance to protect your investment.
These are a few of the primary costs that you can expect as a first-time buyer, other costs will include home inspections, moving costs, utility setup, closing adjustments and appraisal fees. Your real estate agent can provide you with a more complete analysis of costs based on your unique situation.
How Much Does it Cost to Use a Real Estate Agent?
Some first-time buyers assume that working with a real estate agent will come at an additional cost to them. Believe it or not, this is a surprisingly common misconception. In reality, home buyers are not responsible for paying any agent fees or commissions associated with the transaction. These costs are instead covered by the seller.
Not only does it not cost anything, but working with an experienced and knowledgeable agent can actually help you save money on your home purchase. As your dedicated advocate, they will protect your best interests during the negotiations stage to help you get the best price possible on your home.
Not sure which Ottawa neighbourhood is the right fit for you? Explore these blog posts from our blog.
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Is a Home Inspection Really Necessary?
As a home buyer, inspections are the most effective way to protect yourself from unpleasant surprises and financial pitfalls. During their analysis of the home’s structure and systems, an inspector will detect and flag potential concerns with the property before the deal is finalized. This ensures that you’re aware of any potential issues that could arise with the home down the line.
Depending on how your agreement is worded, if the inspection turns up significant concerns, you may have the opportunity to renegotiate or simply walk away. Once again, working with an experienced agent will help you best navigate this part of the process, and they can help you find the right professional home inspector for this step.
Looking for a smooth home-buying experience? Our team has served buyers in Ottawa for over four decades and can help you find your dream home. Send us an email or call at 613-692-0606 to get in touch.