5 questions to ask yourself before buying your first home

Are you thinking about buying your first home? Congratulations! The journey into homeownership will certainly be a memorable one. However, it’s important to ensure you can look back on this process with fondness, as opposed to regret. That’s why you should ask yourself the following questions before you jump into homeownership. This will help you make sure you’re ready to buy a home. Let’s get started!

#1 What does my financial situation look like?

This is the biggest question most new home owners ask themselves. Obviously, in order to buy a home, you need the finances to support it. You should consider your employment and income situation. Do you make consistent, stable income? Have you been employed long-term? These will both be questions lenders will need the answers to. Conventional lenders want to finance low-risk mortgages, meaning the borrower has a steady job and income. If you are self-employed, or have a more inconsistent income stream, this often means you will need to consider alternative or private lenders. This is still a perfectly acceptable pathway to securing a mortgage, but you should know in advance how your finances will impact your lender options.

#2 Where do I want to live?

Buying your first home means making a lot of big decisions. One of the largest, and most obvious, choices you have to make is where you’re going to live. We’re talking about both geographical area and housing type here. Since owning a home is a long-term commitment, you need to be sure you buy a property that suits you. For example, you probably don’t want to live in a rural five-bedroom house if you’re a couple who needs easy access to transit into the city. 

Take some time to determine your housing needs, which will narrow down location and property type. You might settle in a rural or urban area, somewhere in the suburbs, in a detached house, townhome, or condo. There are many options you need to consider before you start searching for your first home. Narrowing down your needs now will make the house hunting process quicker and more efficient!

#3 Can I handle mortgage payments?

Once you buy a home, you’ll start paying for the mortgage itself. This is usually in the form of monthly payments. You need to make sure you’re comfortable making your payments consistently, and on time. Late or missed payments can result in penalties and fees that add extra stress to your mortgage. If you develop an inability to make your payments, this could result in consequences like being house poor, or even defaulting on your mortgage. The good news is buyers today are stress tested to ensure they can handle their mortgage payments. Still, it’s important to evaluate your own feelings and comfort before making any commitments to homeownership!

#4 How big should my down payment be?

Your down payment is the biggest upfront cost of buying your first home. This means you need to spend a lot of time saving up for this contribution, and deciding how big it will be. The size of your down payment is influenced by the purchase price of your potential home. Remember, homes up to $500,000 can have a five per cent down payment, while higher purchase prices require down payments between 10 and 20 per cent. Take the time to consider your budget for the purchase price of your home, and how much you can contribute in the form of a down payment. The larger your down payment, the lower your monthly mortgage fees. However, a smaller down payment may allow you to break into the market faster. You can talk to a broker about which option may be best for you!

#5 Do I want to become a home owner?

Finally, the biggest question of all: Do you want to own a house? You might say yes without giving it much thought, because who wouldn’t want to own their own property? However, it’s important to think about what this entails before buying your first home. Homeownership comes with big responsibilities. You are in charge of the maintenance, repairs, and finances associated with owning a house. You will have to pay property taxes and keep savings ready for emergency home expenses. If you’re not ready for these responsibilities just yet, that’s okay! You shouldn’t feel pressured to become a home owner. It’s best to buy a home when you’re truly ready for it. 

Buying your first home will be an exciting experience. It will also be a busy one! That’s why it’s important to get a mortgage broker involved early in the process. We can work with you to make sure you find the best lender, product, and rate. We are here to answer your questions, and guide you through the process with ease. Buying a home can feel stressful, so remember you don’t have to go through it alone.

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.