Beginning a home search is exciting and many people just jump right in without considering all the elements that make a home truly right for them. It is a complicated and personal process. With an unsuitable choice, you could lose money, waste time and effort relocating, or even put your family’s health in danger.

Choosing a Neighbourhood

Remember that you can renovate a house, but neighbourhoods take years to change and there is no guarantee they will change for the better! On the other hand, if you really love a certain part of town but it’s out of your price range, you may way to consider buying a less-than-perfect home then doing renovations. They can be quite expensive so try to make improvements that will be reflected in the value when you sell. These renovations have been found to have the greatest payback:

• kitchen 70%

• bathroom 68%

• interior paint 65%

• exterior painting 62%

Tips on Choosing a Suitable Neighbourhood

• When you find a locale you like, take a walk around it. See what it’s like from street level.

• Are the people friendly?

• Are there stores and recreation facilities nearby?

• Contact the local school board if you have children. Do local schools provide good education opportunities? If applicable, are there private/religious schools?

Figure Out What You Can Afford

Consider how much you currently need to live on and how much you actually have leftover every month. People have a tendency to create budgets that look nothing like reality – when I should have $400 leftover, for some reason I only have half that.

Consider these basic costs of buying a new home:

• A down payment of several thousand dollars is required

• Monthly mortgage payments can be 1/3 of the average person’s annual net income

• You may want to pay for a home inspection. Make it a thorough inspection of the home. Ask the inspector to check for asbestos, pest infestation and lead.

 • Consider moving costs. This can range from a couple hundred to several thousand dollars depending on the distance of your move and the number of belongings.

Financing

The sort of home you can afford depends on several things:

• How much you have saved

• How much you earn

• Past earnings

• Your credit rating

If you are concerned about your credit rating, you can usually get a free copy of your rating report from a local credit bureau. Normally all that is required is a couple of pieces of photo identification. Remember, a few late payments or disputed bills can damage your record. Try to pay everything on time and don’t have more than two credit cards. Having a bad rating makes it difficult to get a mortgage, or you end up paying more for your mortgage as a form of insurance to the lender.

Pre-Qualification

Documents from a bank or other lender that indicate that you have the financing to back up an offer on a house verifies pre-qualification. This is a free service and most lenders are happy to sit down with prospective buyers to figure out how much they can afford. Having an accurate idea of a price range you can manage will save time in the bidding process. If there are several people making offers on your dream home, being pre-qualified can make your offer more attractive, since financing is not a question. However, keep in mind that lending institutions will base their final decision about a mortgage on the ability of the buyer to service the debt as well as the property. Most lenders say the two components go hand in hand – the buyer with the ability to repay a mortgage and the property as security in the event of default on payment.

By considering all these points, you can worry less about the process of buying and get busy finding your ideal home!

There are countless advantages to purchasing a new home. You are able to build equity, enjoy pride of ownership, and truly make a home your own. If you are planning to buy property in the near future, preparing now can help you save time and money. Being prepared may also give you an advantage over other buyers. Here are a few tips to consider prior to your home search.

Know Your Bottom Line Before You Start Looking at Homes

I’m sure you’ve heard this before, but think about more than just knowing what price you are willing to pay. Consider the distance you’re willing to commute to work, the number of bedrooms and bathrooms you require and what you need in terms of local amenities. If you have children, you’ll likely want to consider schools and parks in the area. By determining your bottom line before you begin the search for a home you can avoid making snap decisions based on emotional responses to attractive home features.

Credit Check

Life happens, bad credit happens. But who wants to discover that they have a bad credit rating after finding the home of their dreams? Before meeting a lender, you can obtain a copy of your report which will give you an opportunity to take care of any unsettled debts. You can obtain a copy of your credit report from TransUnion or Equifax.

Avoid Major Purchases Prior to Buying a Home

Lenders tend to be uneasy when they see potential homeowners stretch their disposable income into buying a car or boat for example. Such purchases can make it difficult to obtain a mortgage or may lower the amount you can be approved for.

Anticipate Higher Interest Rates

Recalculate the above maximum monthly mortgage payment based on higher interest rates. Ask yourself if you can afford to pay a higher monthly payment without sacrificing other commitments.

Determine Your Cash Flow at the Time of Purchase

There are various fees involved with a real estate transaction which are outlined here. Moving from a rental suite, you should be prepared for expenses that may have been previously included with your rent such as heat, water, electricity or cable.

Your Paperwork Should Be in Order

Lenders will often need to see bank statements, pay stubs, and tax documents for the past two years.

Get Pre-Qualified for a Loan

Once you have a calculated budget you can live with, approach a lender to find out if you can get pre-qualified for a mortgage and how much you can spend on a home.

Buying a home is not only a lifestyle change, but it’s also an important investment. To make the most of your investment, plan ahead to find the right home and the best rates.

Buying a home is typically a very exciting time for most people, whether you’re a first time homebuyer or this is the fourteenth time.

Many people think of the basic costs like legal fees, GST (in some cases), property tax adjustments, the cost of movers, set-up fees for utilities, new window coverings, etc.  If you’re a first-time homeowner you should also consider home maintenance costs like purchasing tools, a lawnmower, etc. You may also have to consider some major costs like replacing flooring, windows, or roofs.

On the opposite side, some buyers may gain a cost-benefit from purchasing a new home.  You could purchase in a development that has a fitness center or swimming pool – so no more gym membership or transportation fees.

Next, you’ll want to consider the location.  Look at the location from many viewpoints by asking yourself “Where am I going to live relative to…?”  That relative to should include work (yours and your spouses), leisure activities (children’s classes, golf memberships, night school etc.), children’s school or daycare, proximity to family, best friends or the old neighbourhood.

Life rarely goes according to schedule, so try to determine the likely disruptions to a perfect schedule:

• How often do you or your spouse have to work late or unusual hours?

• Is your commute very efficient?

• Does this mean your children may have to miss soccer practice or other activities they enjoy?

• Is the commute likely to leave you too tired by the time you get home?

It can sometimes be overlooked, but consider the value of your purchase in relation to the emotional costs associated with the purchase.  When you buy a home you want to be satisfied on all counts.

What To Do in the Meantime

Now that you’ve purchased your new home—whether it’s your first home, one that you’ve downsized into, or one you’ve added to your investment portfolio, there are a few things to remember to do while you are waiting for your chosen possession date.

Insured

You will need to ensure that your home has fire insurance set up for the property effective whatever the date of possession will be. I always recommend shopping around to a few insurance providers as their rates can vary greatly. Bring a copy of your feature sheet with you as they will need to know the specifics of the property. Also, bring a copy (or ensure that one gets sent) to your lawyer. If the lawyer doesn’t have confirmation that your insurance is in place, your possession day will be delayed.

Finances

Talk with your mortgage lender and arrange a day to go in and sign paperwork, if applicable. They’ll likely need to see you one more time to sign the mortgage commitment while your actual mortgage documents get signed at the lawyer’s office.

Legal

If you haven’t already chosen a lawyer, you will need to do this now. I can provide you with suggestions if you need. Your mortgage lender and insurance company will also need to know who you are hiring so they can send all the required documentation to them. Once your possession date comes closer, your selected lawyer will contact you to arrange a time to come and meet and sign paperwork. For information regarding the costs associated with the lawyer fees, click here.

Change of Address

As your date nears, you can start setting up your utilities and changing your moving addresses (if applicable). I recommend having Canada Post forward your mail for a year and then you can change anything you might have missed once it comes in. For a more complete list of who to contact before your move, please visit and download my Moving Checklist.

The Big Day

Once you have seen the lawyer, please notify me so I know things are on track. Then we can arrange a time to do the walkthrough on possession day to make sure that the home is what you remembered and I hand over the keys. Possession is typically at noon the day of but we can meet anytime after that, whatever works best for your schedule. Usually the walkthrough is quite short and we just do a quick look of the home to ensure that everything that was supposed to stay is there and anything that wasn’t is gone.

After that, you can now enjoy because the house is now yours to move in and make your own.