01 Jun 8 Tips for First Time Home Buyers
Making the switch from renting to becoming a homeowner is one of life’s great milestones. If you are looking to become a first-time home buyer, this list of tips should help you avoid beginners’ mistakes:
- Find an Ottawa real estate agent. Before you start browsing neighbourhoods for open houses or scouring through listings online, you should enlist the services of an experienced Ottawa real estate agent. You’re new at this, but they make a career out of finding the right home for people just like you. Look for an agent who specializes in residential real estate in your desired neighbourhood and price range.
- Apply for a preapproved mortgage. A preapproved mortgage can be very helpful because it sets your maximum budget from the outset. You won’t waste your time or get your hopes up about homes that simply don’t make financial sense. Instead, your Ottawa real estate agent will help you find a dream home at a dream price.
- Don’t become “house poor.” Just because you can technically afford to spend a higher amount on a home doesn’t mean you should. Instead, buy a home that allows you to enjoy a comfortable lifestyle and not struggle to meet payments for other obligations.
- Use tax incentives. If you are a first time home buyer, you are eligible for certain tax incentives to facilitate your home purchase. The Home Buyer’s Plan (HBP) allows you to withdraw up to $25,000 tax-free from your RRSP to use toward a down payment. The First Time Home Buyer’s Tax Credit allows you to claim up to $5,000 toward a qualifying home purchase.
- Save your bacon with a home inspection. Your Ottawa real estate agent will recommend your home purchase conditional on a home inspection. This can uncover hidden concerns that could cost you a lot of money down the road. If there are huge red flags, you can always walk away before it becomes your problem.
- Budget for extras. The list price of your desired home is a large expense, but it’s only one of many. Make sure you account for extra costs – everything from paying a moving company to title insurance the set-up fees for utilities in the new home. Always set aside funds to pay for closing costs as well.
Keep these tips in mind, and you can enjoy a smooth transition from renter to homeowner.