5 Must-Know Tips for the First-Time Homebuyer
Buying a home for the first time can be an overwhelming, comprehensive and emotional process, with a number of factors to consider from budget to neighbourhoods and amenities. To help put your mind at ease, here are the top five things to know when kicking off your home search.
Get Pre-Approved for a Mortgage
The first step when beginning your home search is getting pre-approved for a mortgage – this will tell you how much you can or cannot afford and is guaranteed for 90 days while you search for your home. Knowing what you can afford frames the rest of your search and helps you avoid wasting time looking at something that is over your budget.
Consider Presale and Resale
There are a few key differences when considering a presale condo, the largest being that since the home is not built yet, you will not be able to move in right away. That means your mortgage does not begin until the home is built. If you are not in a rush to move in and need some time to save some extra cash, this can benefit you.
Be sure that your first home will be suitable for your lifestyle for at least five years. If you are considering a small space, think about where you will be in five years time – are you considering living together with a partner or starting a family? If so, you will want to make sure there is ample space when that happens.
Hidden Fees: Closing Costs and Strata Fees
Hidden fees associated with closing costs are often overlooked. These include things such as mortgage insurance, appraisal fees, lawyer/notary fees, GST (on newly built homes) and Property Transfer Tax (PTT). These costs can vary depending on the type of home you choose.
First-Time Homebuyers’ Program
Qualified first-time homebuyers in British Columbia are exempt from Property Transfer Tax (PTT) as part of a program subsidized by the BC government. This program eliminates PTT for qualifying first-time homebuyers for up to the purchase price of up to $500,000– this means sizeable savings of up to $8,000.