Buying your first home can be thrilling, rewarding, and deeply satisfying, but it can also be taxing, frustrating, and a source of stress. Luckily, with a few basic strategies you can avoid most of the pitfalls and navigate through a successful purchase. Read on for some best-practice advice to help you purchase your first home!
Budgeting and Saving
If you don’t maintain a personal monthly budget, now is the time to do so! You will need to have a clear picture of your monthly household income, your expenses, and how much you are saving. If you’re an Excel wiz, you might feel comfortable building this on your own. If spreadsheets aren’t your thing, there are numerous good personal budget sites and apps available online.
As a rule, you should aim to be saving 15-20% of your after-tax income towards your down payment. This will ensure that you’re able to save in a reasonable timeframe, and that once you purchase your first home, you will have the cash flow available to handle the ongoing expenses of home ownership. If you cannot put this amount towards savings, there are two potential solutions; increase your income or decrease your expenditures.
Mortgage Pre-approval
Mortgage Pre-approval
If you’re buying a home under $500,000, you will need to provide at least 5% of the purchase price as your down payment. But if the home is more expensive, you’ll need to save as much as 20% of the purchase price for your down payment.
It’s a good idea to start saving early and talk to a mortgage broker when you first start thinking about buying your first home. They can give you a clear picture of how much you can afford and give you a pre-approval for a mortgage. Plus, they can give you tips on strengthening your finances and credit score before you apply for a mortgage which will help improve your chances of being approved for the amount you need. You can use my mortgage payment calculator to estimate your budget for buying a home as a rough idea.
The WIN Method
The WIN Method
If you close your eyes, what does your dream home look like? How many bedrooms does it have? How many bathrooms? Is it on a quiet tree-lined street, or is it right in the centre of the action? Is it a detached house, semi-detached, or a condo in a high-rise building? What amenities are located near it, such as parks, stores, or schools? What neighbourhood is it in? These are all things you need to consider. Buying your first home is a big investment, and you’ll want to make sure you find a home that is right for you. It can be helpful to adopt the “WIN” approach when thinking about your first home. WIN means wants, importance, and non-negotiables.
Wants: This is your wish list. List every feature you’d like in your dream home.
Wants: This is your wish list. List every feature you’d like in your dream home.
Importance: Rank each item based on its level of importance. Helpful categories here are:
- Must-haves: Essential features that you cannot compromise on.
- Should-haves: Important features that are high on your priority list but are not dealbreakers if they are missing.
- Could-haves: Features that would be nice to have but are lower in priority.
- Won’t-haves: Features that you don’t need or want.
Non-negotiables: Your ranked list will help you understand where you have room to compromise. Your non-negotiable list should be short. The reality is that no home will check every box, so it is important to be flexible. Your "must-haves" are your true non-negotiables, while your "shoulds" and "coulds" are areas where you can adapt based on your budget and market realities.
Hire a Guide
Hire a Guide
Buying your first home means navigating through uncharted territory. Having a knowledgeable guide is essential as you commit to purchasing your first home. Buying a home can be stressful and frustrating; a real estate agent can ease some of the tension and anxiety you feel throughout the process. If you work with someone who will be dedicated to finding exactly what you’re looking for and something you’ll be able to afford, your first home-buying experience can be enjoyable and rewarding.
As a licensed REALTOR®, I pride myself on having the knowledge, skills, and abilities to serve as a trusted guide for first time homebuyers. I can help you prepare for your purchase, guide you through the steps to get there, and provide support all the way through closing and move-in!
Final Thoughts
Final Thoughts
Buying your first home is a big deal! Putting aside the negativity that permeates the media about homebuying in Canada, purchasing a home is a realistic goal for many Canadians. It may require a bit of financial restraint, a healthy helping of patience, and some hard work, but with the right approach owning your own home can be a realistic goal to set.
If you are considering buying in St. Thomas, Ontario don’t hesitate to reach out to Graham Beatty at gbeatty@thriverealtygroup.ca. As a licensed real estate professional, Graham can help you find your perfect home!