THE COMPLETE FIRST TIME HOME BUYER GUIDE
First Time Home Buyer Guide: Buying the first house or a first condo is a moment in life that must be well prepared and then celebrated! Owning your first house is a project that requires much thinking and planning, but which offers its share of advantages.
Buying a first home is not only planning for the future, stop paying rent to someone else and owning your own home. It’s also an investment that could prove interesting.
However, becoming a homeowner entails that you familiarize yourself with a host of concepts that you may be less familiar with: down payment, mortgage pre-authorization, RAP, etc. Fortunately, this article has got you covered on some basic things you need to know before making buying your dream house.
Now That You Want To Become A First Time Home Buyer
Owning a cozy nest to your liking, building assets for retirement, being surrounded by two dogs and three cats… Good gracious, there is no shortage of reasons for abandoning the life of a tenant and the sprint of the first of July that accompanies it.
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In fact, approximately 7 out of 10 Americans dream of owning their dream home. However, even if everyone thinks of the down payment that the purchase of a first home requires, there are some costs that we all tend to forget.
Below are the 9 essential steps which should not be underestimated and their expenses, which amount to 2 or 3% of the value of the property.
First Time Home Buyer Guide: 9 Essential Steps To Consider
Before signing the deed of sale for a house or condo, an inspection is required. A building inspection specialist will be able to explain the strengths and weaknesses of the property, in addition to identifying the renovations to be planned and the additional costs to come. It protects you from uncomfortable surprises.
Cost: Varies depending on the size and year of construction of the property. Expect $500 or more.
In order to ensure you pay the right price, the real estate appraiser will be able to give you the market value of the house you want to buy, taking into account the materials used, the year of construction, the location, the maintenance, and renovations carried out, etc. It also happens that the bank requires an appraisal visit as a condition of the mortgage loan.
Cost: Varies depending on the property and its location. Count between $500 and $800. When banks request the cost of the appraisal, they usually absolve it as a condition of financing.
To conclude the purchase for any real estate transaction, you must use the services of a notary. No notary, no house. It’s that simple! The role of a notary is to protect you all through the process of purchasing your house.
He will ensure, among other things, that your title deeds show no irregularity. The notary is also responsible for preparing numerous documents, including the deed of sale, the mortgage deed, and the registration of the property in the Quebec land register.
Cost: Approximately $1,250. However, several factors can influence his fees, such as the region or the type of property you are buying.
The Welcome Tax
To mark your arrival, the welcome tax, also known as the real estate transfer tax, is collected by the city where your new home is located. This is a single payment, which is made following the conclusion of the sale at the notary.
Cost: The welcome tax is calculated based on the price of your property.
To participate in life in your city as a homeowner, you will have to pay your fair share of the State taxes as well as other utilities each year. At the time of the sale, the notary will calculate your share for the current year by checking the date of purchase of your house.
If you go to the notary on July 1, in the middle of the year, the seller and you will each pay half of the taxes. If the seller has already paid all the taxes for the year, you will have to reimburse your share at the notary. This share will be calculated on a pro-rata basis for the days of possession of the property, and separately for municipal and school taxes.
Cost: Varies by city. Taxes represent approximately $350 and city taxes $1,750.
For a well-maintained building, condo fees and other common charges/expenses apply only in the context of a co-ownership and allow you to pay the costs related to the maintenance of your building. This could be heating or plumbing, for instance, as long as these facilities are shared.
To protect the borrower and the lender at the time of purchase, especially if your down payment is less than 20% of the value of your property, you will need to take out mortgage default insurance. A possible cost to avoid with a sufficient down payment.
Cost: Varies according to your situation, your professional status, your credit file, etc. but also, depending on your down payment. The greater the gap between your loan and the value of your property, the greater the cost of your mortgage loan insurance.
For a successful transition, moving to a new home always entails moving costs, whether professional movers are used or not.
Cost: Count between $500 and $1,000 for a moving company and about $250 for the rental of a truck, not to mention the pizzas and beer for the friends who will lend you a hand.
To feel good at home, it’s no secret that who says new house, says spending on renovation and decoration! From acquiring a mower to buying new curtains, one would almost be tempted to say that being at home, for real, is priceless. And this is all the more true when you move away from an urban center and you have to buy a second car and drive a few more kilometers each day.
Cost: It’s up to you and the state of your new home.
Before having the keys to your dream house, you will have to do some calculations and I hope you know you are better equipped to do it!
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