Are you ready to become an owner? Buying a home is one of the most important and exciting decisions you make. We have five tips to help you get started:
1. The money matters.
Before embarking your body and soul in the process of buying a house, there are a few things to consider:
Pre-approve mortgage Or Pre Qualify for mortgage.
Unless you have the money to pay for your entire house, you will need to Qualify for mortgage. So that’s the first thing you should do. Start by visiting your bank to find out how much you can afford.
Be aware of the costs from the beginning.
You will need to have money set aside for any costs associated with the purchase of a home, such as down payment (a minimum of 5 to 20% of the amount of purchase 1 ), home inspection ($ 300 to $ 500 2 ) and assessment fees ($ 350 to $ 500 3 ). You should also have enough savings to cover two to six months of regular payments for insurance, property taxes, utilities and moving expenses.
Do not forget the closing costs.
This includes legal and notary fees, land transfer tax and other fees. Australian Home loan requirements and Housing Corporation (CMHC) recommends saving between 1.5% and 4% of the purchase amount to cover them.
Take advantage of discounts and credits for a first purchase.
The Government of australia is offering a $ 5,000 First Time Home Purchase Tax Credit (HICP), which could save you up to $ 750 in federal tax relief. The Home Buyers’ Plan (HBP) allows you to withdraw up to $ 25,000 from an RRSP to buy a home. Finally, you may qualify for a rebate of a portion of the GST or the amount you paid on the purchase price of your new home.
2. Go beyond appearances.
You might be in love with the floor plan, the finish or the beautiful backyard, but that’s not all that matters. Some parts can not be changed easily once you have purchased and this could have a significant impact on safety, repair costs and even your insurance. It’s good to know what you’re doing by asking the right questions in advance.
Find the year of construction of the house.
New homes are built to new standards and legal provisions, so repairs should be cheaper to make than older homes, which could save you money on your insurance. You can also expect better materials that will save you money on utilities, for example. New construction usually comes with some guarantees.
Find out what type of heating system is used.
The ideal is to look for a home with an electric or gas heating system, since they are safer and can save you money on insurance. Oil-fired heaters and wood-burning or wood-pellet stoves can reduce your utility bills, but expect an increase in your insurance premiums as these heating methods are considered more risky.
Know the age of the roof and its type of construction.
If the roof seems to have seen better days, remember that it may need to be replaced, and it is not a small expense. In addition, in general, the older your roof, the higher your insurance may be, or in some cases may not cover your roof. On the other hand, certain materials (like concrete or slate) could save you on your insurance according to your region.
Ask questions about wiring and plumbing.
Stay away from button and tube wiring or 60 amp electrical systems, often found in older homes. They present a serious security risk. Also look for new and more durable copper or plastic pipes, which are less vulnerable to corrosion and leakage (so they are less likely to cause water damage). These tips will also help you reduce your insurance costs.
3. Get all the details on any renovations or updates.
On the surface, the updates may seem like an excellent selling point. However, remodeling done by oneself can easily become a problem for future homeowners. It’s always a good idea to ask for evidence that renovations have been done by professionals or copies of permits for each stage of the project, so that you know that everything has been done in the rules.
4. Do not neglect the inspection.
When you really love a home, you should always have it inspected. Even if you have already inquired about the quality of the renovations, the inspection can warn you of any other problem you would not have seen otherwise. Serious flaws, such as problems at the foundation, can be an argument for withdrawing from the purchase. On the other hand, minor details can be to your advantage during negotiations.
5. You can learn a lot from the claims history.
Claim history can give you important clues about what problems a house might encounter in the future. The most important concerns are damage caused by fire or water. Before buying a house, consider asking the claim history report to the seller.
Want more tips for buying your first home? Learn from those who have already been there. Discover the stories of Pam, Vice President, Underwriting Initiatives and Dominique, Team Leader, Montreal Customer Contact Center on the purchase of their first home.