Buying a Home in 2020? Here’s How to Prepare in 4 Easy Steps
January 16, 2020
Whether you're buying your first home or your fourth in 2020, keep these tips in mind for homeownership success.
Check Out the Market
Do your research on the current state of the real estate market to determine if now is a good time to purchase. If you’re a first-time homebuyer, your best bet is to purchase in a buyer’s market, which means there is ample supply of homes on the market and competition is less.
If you’re selling a home and purchasing a new one, market conditions are slightly less important because you are both a seller and a buyer; if the buyer’s market is competitive, you will likely sell your home for a generous price and quickly, but you will also likely pay a little more and be in greater competition for your new home.
Make a list of cities that you would be open to living in, if you’re hoping to move out of your current location. Consider the proximity to loved ones, workplace, schools, and hobbies when making a list of potential home locations.
Review Your Finances
Now that you have determined it is the right time to buy a home, you need to review your finances to determine how much of a down payment you have for a home. To have a home with an uninsured mortgage, you will need 20% down. Or you can put down as little as 5% but will need to take an insured mortgage which will cost you a fee. If you are selling an existing property, you can use the equity in your home for part of or all the down payment for your new home. If you are a first-time homebuyer, you will need to have the down payment saved in cash. There are some incentives for first time buyers, which you can learn more about here.
When reviewing your finances, take into consideration any upcoming expenses you may have while house hunting, including vacations, car repairs, etc. Any out of the norm expenses should be noted and considered when determining your down payment amount.
You do not want to use all your cash for the down payment, as you will need some funds for buying-related and moving-related expenses. Some of these expenses could include a home inspection, lawyer fees, land transfer tax, and movers.
Get a Pre-Approval
Once you know where your finances stand, you should visit your mortgage rep to get a pre-approval. Although a pre-approval is not mandatory for house hunting, it is helpful to know how much you can afford before you start looking. This is also a good time to determine what type of mortgage you want. Do you want a fixed rate or variable? Do you want low mortgage payments with a longer amortization period, or do you want to have higher payments that allow you to pay off the home faster? Consider your current income and lifestyle, and your long-term homeownership goals.
Find a REALTOR®
Using a REALTOR® provides you the peace of mind knowing an expert has your best interests in mind when making the biggest purchase of your life. Your REALTOR® will help you navigate the negotiation process, sign the deal, attend your home inspection with you, and assist from the start of the homebuying process until your closing date.
An especially appealing part of using a REALTOR® to purchase a new home is the sellers pay the cooperating commission, so it is at no-cost to you to use a REALTOR® while house hunting. It is important to select the right REALTOR® for you, here are the right questions to ask when selecting a REALTOR®.
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With Purplebricks, find your dream home and get $2,000* in cash back! We pair you up with a Home Buying REALTOR® in your neighbourhood whose only job is to find the perfect home for you and your family. If you’re ready to take the next step and find a REALTOR® to help you look, visit Purplebricks.ca today or give us a call at 1-855-348-1820 and we’ll get you started.