Okay… so buying your first home won’t be free, but the resources that get you on your way can be! This series of blogs is going to outline the step-by-step process of how to go about preparing to buy your first home. You will be a little disheartened to know that HGTV has slightly sugarcoated the buying and selling process. Getting into the real estate market isn’t easy, and it can be complicated and time-consuming, but it is absolutely possible and that’s what I’m here for. This blog is focusing on where to begin and what resources to utilize when buying your first home. It’s time to start planning!
Step 1: Stop Spending And Start Saving
The majority of millennials living in their own home are having to pay a fair price for rent, as rent has been increasing with the increasing prices of homes in Guelph, Waterdown, and the majority of cities in Southern Ontario. Some couples are paying up to $2000 in rent per month. That is likely the same amount (or higher!) than a monthly payment for what a first-time homebuyer would be paying monthly for a mortgage.
So, why is it that millennials “will never be able to purchase a home”? There is no reason. Yes, you do need a sufficient amount of equity saved to be able to provide a down-payment. Yes, there are other monthly costs on top of the mortgage payment. But yes, all of this is possible with some time and planning. That’s where the “stop spending and start saving” comes in. We are all guilty of overspending…going out to a “cool” coffee shop for a $5 coffee when there is usually a Tim Horton’s or McDonald’s selling a $2 coffee down the road. Of course, treating yourself with your hard earned money is great, but there needs to be a limit.
Make an incoming and outgoing financial chart to track your spending and your income. Try to decrease your spending and get in the habit of putting a certain percentage of every paycheque away. See your financial advisor to make sure you are gaining some sort of interest on your savings and you’ll be surprised how much money you’ve put away in a year’s time.
Step 2: Talk To A Mortgage Specialist
At TrilliumWest Real Estate Brokerage, we have two wonderful in-house RBC Mortgage Specialists that assist clients with their mortgages. A mortgage specialist can help you understand the ins and outs of the financial side of owning a home, and they can help you understand how much money you realistically need to save before being able to purchase a home. Don’t wait until you find the perfect home to see a mortgage specialist. It’s important to understand how much you can afford before you go searching for your dream home. As 2018 approaches, there are new mortgage rules coming into the approval system that will affect many first time homebuyers, so now is a great time for you to go and speak to a mortgage specialist to find out how this may affect you. This is a free service for buyer’s to use, so the big question is….why would you not?
Step 3: Talk To A Realtor
Surprise! This service also costs you nothing! Buying a home can be complicated and tiring, but a Realtor helps relieve the stress and ease the process. We are continually educated on the ins and outs of a real estate transaction and we know how to look past the “pretty” in a home and get to the nitty-gritty stuff.
We study market trends and have applicable knowledge of contract law. Yes, you can go to Realtor.ca and search homes for yourself, but when you use a Realtor, you have someone watching the market for you. As a Realtor, I will send my clients a listing as soon as it pops up on the market. I will advise clients on why a home could be a great investment or why it could be expensive and time-consuming. I go and look at houses in the Guelph, Waterdown and surrounding areas to be up-to-date on what is currently sitting on the market. I become a partner in your home buying process, and I am constantly looking out for you to make sure I can find you a wonderful first home. If you want to know more about what a Realtor can do for you, send me an email to get a copy of TrilliumWest’s buying guide.
Step 4: Be Realistic About Your Expectations
Your Realtor and mortgage specialist will help you with this, but until you are able to get your mind around the fact that this is your first home and you may not be able to check every wishlist box off, you likely won’t be able to find a home within your criteria. If you’re looking in Guelph, chances are your first home won’t be that adorable century home Downtown, or the 2500 square foot home with all of the high-quality finishes. However, you may be able to get the semi-detached century home or a beautifully finished condo.
Millennials need to remember that the most important thing about buying your first home is to be able to get into the housing market. You don’t need to buy your forever home as your first purchase. It doesn’t need to be perfect and have all of the upgrades and finishings that you dream of. You are able to put your finishing touches on a home as you grow in it. Be realistic about your expectations and you’ll be surprised at what homes you may find.
There it is! Your first four steps in purchasing a home. And yes, that’s right, all of the resources mentioned cost you absolutely nothing, so there is no reason you can’t get started today on planning for the purchase of your first home! If you’re looking at Guelph, Waterdown, Burlington or any of the surrounding areas, don’t hesitate to reach out and ask questions!