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14 Steps First-time Home Buyers Should Follow

Sucheta Pradhan Aug 29, 2020
Planning to buy a new home for yourself and your family for the first time? Surely, you are a bit confused about the entire process.
Page through for the 14 steps all first-timers should follow while buying their new dream home!
Six Months Before Looking at Homes ...
#1: Pay Off Current Debts and Credit Card Bills
Consolidate smaller loans or pay them off. Also, pay off your credit card bills and maintain a zero balance. If you don’t have a credit card, get one, use it, and keep paying it off.
#2: Save for Down Payment and Closing Costs (8% of Home Price)
Put money away for that down payment. Save a little with every paycheck.
#3: Use the RRSP Option when Saving for Your Down Payment
Put the maximum allowed into an RRSP. You’ll be able to use it as the down payment. BONUS: If the money is in the RRSP for at least 90 days, you’ll also get a tax deduction in the following year.
#4: Check and Improve Your Credit Score
Talk to a credit counsellor or mortgage broker to help you improve your credit score. Buyers with the best scores get the best mortgage rates.
While Looking at Homes ...
#5: Choose a Real Estate Agent
Your real estate agent is like your home-buying team quarterback; the most important player on your side.
#6: Get Pre-approved by the Right Lender
Not all mortgage lenders are created equal. Ask your real estate agent to refer you to the right lender.
#7: Set Up a Search for Your Home
... preferred neighbourhood, and as per your lifestyle.
Your agent will set up an automated computer search for your perfect home within your price range ...
#8: Talk to Your Agent about Bidding Wars
Depending on the market, your potential homes may be super popular and subject to bidding wars. Talk to your agent about your ability to compete or avoid such situations.
#9: Look at Homes in Your List
Time to have some fun and look at the homes in your search list! One call to your agent is all you need to do and he/she will reserve your private showings.
#10: Make a Competitive Offer
Found a great home? Time to make a realistic and competitive offer. This is yet another job your agent can guide you with.
#11: Get a Home Inspection Done
If at all possible, get a home inspection done by a qualified and certified inspector. Ask your real estate agent for a couple of inspectors’ names. Do not rely on the Internet to find them.

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After Buying, but Before Taking Possession ...
#12: Buy Life Insurance, NOT Mortgage Insurance
You just made the largest purchase of your life. Get the right insurance coverage to protect your loved ones.
#13: Get Property Insurance Before Moving In
Make sure you protect your investment as well. In most areas, property insurance is mandatory, especially if you’ve got a mortgage.
#14: Don’t Mess Up Your Credit Rating
Don’t buy a car or rack up credit cards before moving into your new home. Some lenders will re-check your credit score just before possession. If they find problems, you could still lose the house.

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