As a first-time home buyer, you have many steps that you must take but there are professionals that can help guide you along the way.
Quick Read:
Your Accountant
Your accountant can look at your cash-flow, so you understand your finances now and your financial outlook in the future. An analysis of your income is going to give you an idea of how much you can afford in terms or mortgage payments. If you’re in the market for buying a home, this analysis is going to help you out a great deal. The bank may say you can afford a higher mortgage but by analyzing your finances, you will know if this is the case or not. The cash flow analysis lets you know what you can or cannot afford. You should work with an accountant that deals with first-time home buyers. The accountant should be a member of the Chartered Accountants of Canada.
Mortgage Broker
You will probably need a mortgage broker to get a loan for your first home unless you have a lot of money saved. If you have a good relationship with your current financial institution you may want to work with them. You will only be able to get a loan through your bank, so it can be a good idea to check out several lenders, so you know the options that are available to you. One way to do this is to work with a mortgage broker. These brokers work with various lenders and they can help you get a competitive interest rate and their services are free.
The broker gets a fee from the lender for referring you as a client to them for the loan. To determine what is best for you, the mortgage broker will want to know about your current financial situation and the goals you have long-term for your finances. The broker will give the required paperwork to the lender to assess your credit. Once you get the loan approval the broker will work with you, so you understand the contract, conditions, and other information contained in the document. The broker will also help you with the process to close your mortgage transaction.
It’s a good idea to get some recommendations from family or friends about a good mortgage broker as they rely on word of mouth and their reputation to get new clients. You should make sure that they work with the Canadian Association of Accredited Mortgage Professionals which is the industry association for mortgage brokers. This association ensures that the broker has gone through the right training and has the appropriate code of ethics. You also need to ensure that the broker works with a wide range of lenders, so you can get a good rate on your mortgage which is competitive.
Real Estate Agent
Once you have secured financing, you need to find a home. A real estate agent is a good place to start as they have the experience to help you find a home. They understand market trends, read studies, and know how homes are bought and sold. They can help you find a home and then work with you as well as the seller to work out a deal for the home. You should work with a real estate agent that works in your local area or the area where you want to buy the home as this is where they have the most expertise. You don’t have to pay a real estate agent anything as they are paid by the home seller. You should ask people you know for real estate agent recommendations. In Canada, real estate agents are governed by the Canadian Real Estate Association. They have regulations, rules, and a code of ethics that all realtors must adhere to. A real estate agent must always upgrade their skills, so they can maintain their status with the real estate board.
Things to Ask a Realtor
- How long have you been a realtor?
- What areas do you focus on the most?
- Do you work with first-time home buyers?
- Do you have former clients that I can talk with about their experiences working with you?
- How do you communicate with your clients?
Notary or Lawyer
It can cost you a lot of money to hire a lawyer or a notary, but the money is going to be well spent. Before you sign any deal there will be a contract to sign. The lawyer can go over this contract for you. The lawyer will ensure that the contract follows all laws and they will also discuss issues with the property with you. It’s important to talk with a lawyer that is a real estate professional. In many law firms there will be a lawyer that is specialized in real estate so look for those professionals. Family or friends may be able to help you find the right lawyer for your needs. Your real estate agent or mortgage broker may be able to offer a referral for you.
Summary
You have a lot to think about as a first-time home buyer. You shouldn’t rush the process and never be afraid to ask questions or seek out more information before you buy your first home. Talk with the experts to gain full knowledge about real estate and the entire process before you make that final decision to buy or close any deal.
