It’s a new year, and you know what that means — it’s resolution-making-time!
If one of your goals for 2019 is to buy a home, then you have an exciting, if not a little intimidating, year ahead. Especially if you are planning to purchase your first home, which is a huge milestone but also means navigating through some uncharted waters.
If you’re planning to purchase a home in the Okanagan and surrounding areas in the next year, add these resolutions to your list to make the process as smooth as possible.
Make a budget and save, save, save
Ideally, if buying a home is on your radar, then you’ve already been saving up for a down payment for awhile now.
Saving for a home often requires sacrifices, and this will likely be a big resolution for you this year. Make a budget and see where you can cut unnecessary costs, like dining out or expensive entertainment. Find ways to still enjoy the things you like to do, but more affordably. And most importantly, stick to it.
It’s also important to recognize that your down payment isn’t the only cost you need to save up for. There are closing costs, moving and transitional expenses, and you should be sure to have an emergency fund of roughly six months’ income just in case.
You may even want to consider meeting with a financial advisor to make sure you’re doing all that you can to create a nice nest egg.
Monitor your credit & pay off your debts
Your credit score is an important metric when purchasing a home. The better your credit score, the more likely you are to receive a mortgage loan with a lower interest rate.
Seek out a credit report — there are services online, or you can ask your financial institution. Figure out where you currently sit, and if it’s an acceptable score for a decent mortgage rate. If you have any credit card debts, make it a priority to pay them off. The sooner you work on improving your credit score, the sooner you will earn approval for a mortgage loan at a reasonable rate.
Meet with a lender or mortgage broker
Speaking of mortgages, meeting with a lender or mortgage broker before you begin house hunting is recommended. A mortgage broker will not loan you money directly, but can help you find a preferred lender.
You may even want to consider getting pre-approved for a mortgage so you know how much you can really afford, helping you set realistic expectations while shopping for a home. A pre-approved mortgage will tell you the maximum amount you may be eligible for, and the interest rate. Before pre-approving you for a mortgage, a lender will consider your credit, assets, debts, and income.
Set a home budget & make a list
Now that you have an idea of what you can afford, you can start looking around the market to see what’s in your price range. Make a list of your needs and wants for your home, and be realistic based on what you see in the marketplace.
Are there certain neighbourhoods you prefer over others? Are you looking for a detached home, or would a townhouse or condo be more to your taste? Do you need a yard, garage, extra space for a growing family? Can you go without for a few years so that you can get into the market first? Start writing things down, but be flexible and know that some of these items might change as your shopping gets more serious.
Make a list of your needs and wants for your home, and be realistic based on what you see in the marketplace.
Find out if you’re eligible for assistance programs
This is especially relevant if you’re a first-time homebuyer. Find out if you’re eligible for any assistance programs available in British Columbia, such as the First Time Home Buyers’ Program or the Home Buyers’ Plan. You can learn more about these programs and other tips for first time homebuyers in the Okanagan here.
Find a REALTOR®
Working with a qualified REALTOR® when purchasing a home is the best way to ensure that your home buying experience is a positive one. A REALTOR® knows the market better than anyone, is able to interpret important industry data, and always works in your best interest. They will help you find the perfect property, obtain that property for the best possible price, and follow the sale through to the end.
You can learn more about the benefits of working with a REALTOR® when buying a home here.
Stick to these resolutions, and you’ll be well on your way to home ownership!