The path to that first home starts with plenty of homework

There is a lot of homework for the potential first-time buyer to do and many questions to answer before making the plunge, and it starts with deciding whether home ownership is really right for them.

– Match your needs to your wallet: Decide what you need in a home, and establish what you can afford to pay. Most financial institutions include “mortgage qualifier” calculators on their websites to help you figure out how much you can afford to spend.

– Test drive home ownership: Calculate the monthly costs of home ownership, including mortgage payments, taxes, utilities and maintenance fees, and practice paying it for six months, setting aside the difference in excess of rent in a savings account.

– Assemble expert advice: Friends and family offer helpful suggestions, but professionals will have more answers. Consider consulting a mortgage specialist, a home inspector, realtor(s), lawyer, or notary.

– Get pre-approved for a mortgage: Knowing what you can afford, and what a bank is prepared to lend you, will help ease your search, and allow you to act when you find what you want.

– Take your time: Once you’ve decided what you need in a home — location, amenities, price — search for it and weigh your options. In a buyers’ market, you have time.

– Set a complete budget: Beyond a down payment, transfer taxes and GST, don’t forget about other costs: Utility hook-up fees, possible partial-month utility bills and property taxes, some paint and trimmings to spruce up a new home. Even changing your address can take some money out of your pocket.

– Don’t lose sight of other financial goals: Buying a home will probably be the biggest, but won’t be the last financial decision you make. Remember your RRSPs or other savings accounts, which shouldn’t be sacrificed for your shelter costs.

By Derrick Penner December 13, 2008

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