3 Tips to Prepare You for Your First Home Purchase
Recognized as the symbol of reaching independence, the act of buying your first home is one of life’s most recognized milestones. Extremely arduous yet rewarding, this purchase is one turbulent journey.
Researching all the preparation you need to do can be overwhelming and discouraging. To start your journey off on the right foot, here are three tips that will help prepare you.
1. Find and Raise Your Credit Score
Your credit score is the number that represents your reliability as a loanee. This number is derived from analyzing your history of making loan payments and paying your debt off. Having a good credit score, will not only open more loan opportunities, but lenders will be more willing to offer you favorable loan terms.
To improve your credit score, first figure out where you are at. Pull your credit report from your bank, credit card company, or credit bureau to see what you are working with. If your score is on the lower end of the spectrum, don’t worry! There are ways to make improvements to your score.
The most common method is just making sure you pay on time! Consistently paying your bills in a timely manner communicates that you are a reliable loanee. Another way is to increase your credit limits. The higher limit will improve your debt-to-credit ratio, making the same amount of debt appear as a smaller portion of your available credit.
Don’t forget that the key to a good credit score is consistency. Even though it may improve slowly, you need to prove your reliability over time!
2. See If You Qualify for Financial Aid
As a first time home buyer, there are programs that exist to help make your dream home an attainable reality. Property transfer tax can be a painful fee to pay when you purchase your first home. Learn more about the First Home Buyer’s Program, to see if you are eligible to receive a partial or full exemption from the property transfer tax.
The other program you want to check out is the Home Buyer’s Plan (HBP). In this program, the Canada Revenue Agency (CRA) allows you to withdraw funds up to $35,000 from your Registered Retirement Savings Plan (RRSP) to help buy your first home. Read about the HBP requirements to see if you qualify!
Remember to stay updated on these programs as they are subject to change! Also, continue to research new programs that may form to receive even more financial aid.
3. Work with a Realtor
Moving forward from your credit score and financial aid, there are still so many steps left to take to finalize buying your first home. From discussing loan terms based on varying down payments to figuring out how to negotiate with the homeowner, trying to tackle all these challenges without assistance can be demanding; especially when you are already busy worrying about other areas of your life. With the help of a realtor dedicated to helping you find and purchase your dream home, your life can be that much simpler.
Our team is aware that each client and property carry their own unique needs and values. Each of our realtors are confident in representing you with your best interest in mind. Contact us if you want to start your journey and we’ll help you find the agent you feel most comfortable representing you.