First-time home buying is like entering a real estate amusement park – it’s a rollercoaster of property tours and paperwork, with emotional ups and downs and the thrilling moment when you finally snag the keys at the end of your ride.
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In today’s market where inventory is building up, first-time homebuyers have an advantage. With more options available, you can take the time to carefully evaluate properties and negotiate favorable terms. Sellers, in a market favoring buyers, may be more motivated to work with you, potentially leading to better deals and terms. Here are five steps to help you prepare to buy your first home in 2024.
Evaluate Your Finances
As a first-time homebuyer, building good credit is crucial. It is important to understand your credit. Check your credit score and report. Consider consulting with a financial advisor to address any concerns and improve your creditworthiness.
Create a Budget
Establish a realistic budget that aligns with your current financial situation. Factor in the down payment and mortgage but also ongoing expenses like utilities, maintenance, and unexpected expenses that can come up.
Save for a Down Payment
Beyond putting away monthly sums from your paycheque and counting coins in your piggy bank, explore the assistance programs that may be available to you. Here are the Canadian homebuying programs to help first-time home buyers in this journey.
- First-Time Home Buyer Incentive (FTHBI)
- First-Time Home Buyers Tax Credit (HBTC)
- The Home Buyer’s Plan (HBP) (from your RRSP)
- First Home Savings Account (FHSA)
Provincially there are more programs and incentives available which vary from province to province. Some offer a first-time homebuyer’s credit that provides a non-refundable tax credit in varying amounts. You may qualify for a GST/HST New Housing Rebate (NHR) if you purchase a newly constructed home, and in most provinces and cities there is a Land Transfer Tax Rebate (LTTR) available as well.
Get Pre-Approved for a Mortgage
Work closely with a mortgage advisor to understand the mortgage options available to you. Being pre-approved helps you determine your budget but also strengthens your position when making an offer. In the event that interest rates rise again, locking in a pre-approval will mean that you have locked in a lower rate, and pre-approvals are typically valid for 90 days.
Work with a Real Estate Professional
For a first-time homebuyer, working with a real estate agent is invaluable. An experienced agent can guide you through the process, explain the intricacies of the market, and help you navigate negotiations. It is important to have your own representation as a buyer, especially if you are going through this process for the first time. You’ll want to have an advocate in your corner, solely focused on your needs and interests. While it might be tempting to go directly through the listing agent, having your own representation guarantees a smoother journey, without compromising on your priorities.
Before this real estate ride begins it’s important to be prepared. Over the next few months while you await the perfect place to call home, take advantage of our free downloadable guides with valuable insights including everything from understanding homeownership costs to the full first-time buyer journey from start to finish. Find them all right here!
