Do your homework
Gary Siegle, the regional manager of Invis mortgage consultants, located in Calgary, agrees that new homebuyers can avoid a number of headaches by simply doing their homework before they start house hunting.
Siegle highlights these five key considerations:
Know what you can afford. "New homebuyers need to look at this and say, 'Even though I can afford that much, what does my budget really tell me?'" says Siegle. "What additional expenses might be needed -- that's key."
Be aware: a pre-approval is not a guarantee. The more information and documentation you can give to your financial professional, the more certain you'll be that you can absolutely afford that particular property.
Consider conditions on your offer. "Put your common sense hat back on," says Siegle, "such as 'I want to buy this house and my offer is serious, but it is certainly subject to proper inspections and proper financing being arranged.'"
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Lock-in a mortgage rate before you begin house shopping. All the economic forecasts out there have said that rates have to go up -- we just don't know when. You can typically lock in for 120 days, so get this rate hold as part of your approval, advises Siegle, and then you know what you can afford.
Don't confuse an appraisal with a house inspection. "You typically need both an appraisal and a home inspection," says Siegle. The appraisal is usually looked after by the lender or mortgage insurer, if it is required. The home inspection is something that you would probably organize on your own and doing so can literally save you thousands of dollars in unforeseen expenses.
There are many other considerations and expenses when buying a home, including closing costs, lawyer's fees, transfer fees and title insurance fees, so be aware of how the dollars can add up.
Lastly, when buying a home, "just make sure you deal with someone who understands mortgages," says Siegle. "[Someone who] understands your needs and offers options at a competitive rate."
Diana Cawfield is an award-winning freelance writer, specializing in finance.