If you’re in the market for a new home in the New Year, there are some steps that should be taken first. Unsurprisingly, many of these tasks are related to finances. Property is likely the largest investment you’ll make, so it’s crucial that you get yourself prepared.
Start saving for a downpayment
This is probably the most difficult part of the home buying process. The typical price range for a home in Regina is between $300 thousand and $350 thousand, so you’ll have to shell out a decent chunk of change up front. Down payments are typically around 20 per cent of the price, or $60 thousand to $70 thousand on an average home. Start planning out ways to come up with the money such as RRSPs, savings, or maybe even Mom and Dad can help out.
Check your credit rating
This is important to familiarize yourself with. Credit ratings are on a scale between 300 and 900 and determine your credit-worthiness. According to Equifax, a rating of 690 and higher is considered “good.” Your credit rating, in addition to your debt-to-income ratio, will affect your mortgage eligibility.
Reduce your debt
Have you ever forgotten to pay some of your bills on time before? Turns out, those late payments could come back to haunt you. Late payments negatively affect your credit rating and in turn your potential to qualify for a favourable mortgage. If your credit score is low, work on building it back up before the pre-qualification process.
Get pre-approved for a mortgage
Finding your dream home, then realizing you can’t afford it can be heartbreaking. You can avoid this by getting pre-approved for a mortgage so you know what your budget is. A mortgage pre-approval will lock in your interest rate for 90 days with no obligation to buy in that time frame. A pre-approval will ensure that you shop with confidence.
Online shopping is a great way to start getting ideas. However, having a first-hand look at your potential purchase will always trump the convenience of online shopping. With your budget in mind, go pound the pavement and see what each neighbourhood has to offer. What type of amenities do you require? Do you use public transportation? Are proximal schools and daycares required? Keep these kinds of things in mind, and remember your necessities may change over time.
Make sure you work with an experienced agent that knows about the area and type of home you plan on purchasing. Not only will they help you with viewings, but they’ll also be there to help with negotiations when you’re ready to submit an offer.