Your 5 Essential Steps for Successful Home Buying
Buying a home is arguably the largest and most important investment of someone’s life. This is a very large decision that should not be rushed into; It takes a lot of time and patience and should be thoroughly researched. We’ve compiled a little crash course on how to go about this investment and have outlined some critical steps involved in successfully buying a home. Please consider the point that you’re in in the process and go from there. Let’s set you on a path to home buying success!
Set a Budget
In other words, leave yourself some breathing room and don’t spend your maximum budget! No one wants to live paycheck to paycheck and if you can help it, try to give yourself enough financial wiggle-room to continue saving after your monthly mortgage payment.
Setting your budget is your first step in the home buying process after making the decision to buy a home, and it is very important! Your budget will be determined by 4 major factors:
(1) Your mortgage.
(2) Your down payment.
(3) Closing costs.
(4) Your moving costs.
Before making any more decisions, make sure that you have carefully and thoroughly analyzed and research these factors. To learn more about establishing your home buying budget and what that entails ,take a look at our post on Mortgage Basics!
It’s hard to turn down your dream home when it’s just within reach, but if you’ve spent more than you’re comfortable with, then that financial stress might stop you from enjoying your new home to the fullest.
Pick Your Neighbourhood
When you’re searching for your new home, it doesn’t just involve finding a house, it involves finding a neighbourhood that fits your lifestyle. There are various things to consider when picking the neighbourhood in which you wish to find your new home.
What kind of lifestyle do you live or hope to live? Are you a young family looking for a quieter and suburban area with nearby schools? Perhaps you’re a young couple that enjoys having entertainment and dining within walking distance. Do you drive a lot? What will your commute to work be like? These are just a few things to carefully consider.
Make sure that you write down your neighbourhood requirements before visiting open houses so that you have a clear idea of what it is you’re looking for and what you’re willing to compromise on. This should be apart of your list of needs in finding your new home, something we will elaborate on in the next step!
Think About Your Needs Before Your Wants
Be really clear on what it is that you really need in your new home, versus what you want that may be unnecessary. This is a very important step as the longer your list of requirements, the more difficult it will be to find a home, and the more expensive it will likely be. Not to say that you should compromise on important features, just be mindful of things that you could consider as bonuses.
Requirements are often things that would be expensive to add or change in a home. It is important to communicate the importance of your requirements to your real estate agent so that they can find the right homes for you to view.
Speaking to the last step, this list of requirements includes your neighbourhood requirements as well. See our post on the first steps of the home buying process for more details on establishing your home buying requirements!
Establish Your Buying Strategy
When you have established your budget, you will have an idea of what type of home you can qualify for. However, there are some other factors to take into consideration such as your monthly housing expenses after you make your purchase. These are things you need to plan for.
Mortgage Sandbox has identified four common buying strategies that might help you decide what works best for your unique situation. These four strategies are:
Big Bang: Gather all of your money and resources to get the nicest home possible, taking advantage of an opportunity that may not be able to afford in a few years.
Baby Steps: Just get into the market with a starter home and a small mortgage that meet your requirements. You can upgrade your home every 5-10 years.
Lifestyle Protection: Balance your lifestyle expenses and your housing expenses. Find a nicest home possible for you that doesn’t compromise your lifestyle too much.
Strategic Leverage: Find a home that requires a small down payment, and target the largest possible mortgage amount.
Check out our past post on establishing your home buying strategy for more information!
Hire Your Own Professionals
Find yourself a real estate agent and mortgage broker that is aligned to your values! Why is this so important? Your values guide your objectives and your decisions. When you hire people that aren’t on the same page as you and don’t understand your needs and priorities, it can result in a ton of frustration, wasted time and ultimately dissatisfaction.
Mortgage Sandbox can save you a lot of time and stress in finding the right professionals with our upcoming MatchFinder platform. MatchFinder pre-screens mortgage brokers and agents and matches you with professionals that fulfill your needs and are aligned with your values. All you have to do is answer a short survey and tell us a little bit about yourself. The platform is currently being tested, please reach out if you'd like to be involved in the development process.
The key takeaway here is that a large investment requires a very thoughtful and strategic process. Buying a home can be scary, but it doesn’t have to be as long as you’re prepared. For more in-depth information on the home buying process, please visit our blog and feel free to contact us. We would love to hear from you!
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