Sara Petta
RE/MAX Escarpment
Languages
- English
Specialties
Buyers, Condominiums, Downsizing, First Time Buyers, First Time Sellers, Investments, Multi-Family, Rentals, Sellers
Locations
Aldershot, Ancaster, Burlington, Dundas, Flamborough, Glanbrook, Haldimand County, Hamilton, Hamilton Mountain, Stoney Creek
Two Steps To Homeownership To Take Today
Original Content by Sara Petta, Real Estate Broker | Re/Max Escarpment Realty Inc.
Jun 22, 2023
"A goal without a plan is just a wish." Antoine de Saint-Exupéry.
If homeownership is on your wish list, it is never too early to start taking steps to turn that wish into a goal and help future YOU purchase your first home.
Step 1: Maintain Good Credit
Maintaining a good credit score lays the foundation for a future home purchase. What you do today with your credit is vital for future approval and attractive rates.
Here are some tips to maintaining good credit:
- If you must hold a credit card balance, be diligent with your payments. Whenever possible, pay in full, and always pay on time. If you have trouble remembering to make the minimum payments on your debts, set up auto payment. You can do this even if you intend to pay the full balance, just to make sure you never miss a payment.
- Pay attention to how much credit you have access to vs how much you use on a monthly basis. This is your credit utilization rate. For example if you have access to $10,000 on a credit card, and monthly you charge $9000.00 to said credit card. Your credit utilization rate is 90%. You want to try and keep this rate around 30% or less.
- Choose your credit cards wisely. Stick with 1 or 2 solid cards, and skip the department store cards. The rewards, although enticing aren’t worth the inquiries on your credit which can ultimately affect your score. It can also be hard to keep track of them, risking a missed payment. Avoid opening and closing accounts frequently.
Step 2 : Automate Your Savings
To purchase a home you will need a downpayment and closing costs.
Down payment
A downpayment is the amount of money you put towards the purchase of your home, your mortgage is the loan you receive to cover the rest of the purchase price. Saving for a downpayment can seem overwhelming given the price of homes today, so let’s break it down. The best way to save is to make it automatic. Run your numbers and figure out today what you can afford to contribute to your first home on a monthly basis. Every dollar counts. Set up an automatic savings program that will withdrawal the funds into your downpayment account on a regular basis. Once you’ve figured out your contribution amount, decide where the best place to grow your downpayment is.
Here are two options to consider for your downpayment savings account;
1. Home Buyers Plan - Allows a homebuyer to borrow RRSP contributions for downpayment
Read more about this program here:
2. *Tax Free First home savings account - A tax free savings account for first time homebuyers
Read more about this program here:
Another option that some may qualify for is, borrowing your downpayment. You can read more here;
First Time Home Buyers Incentive - A downpayment loan
https://www.placetocallhome.ca/fthbi/first-time-homebuyer-incentive
Closing Costs
No body likes surprise fees. So let’s get it all out there and list the expenses you can expect when buying a first home.
1. Lawyer Fees
2. Land Transfer Tax *First time homebuyers receive a rebate
3. Home Inspection
4. Appraisal
5. Final Adjustments
6. Moving Costs
7. PST on Mortgage Insurance
Need help estimating your downpayment requirements and closing costs? Reach out to the professionals at Bold Mortgage Group or use their handy calculator below to help set up your goals.