Important Tips to Keep in Mind when Buying a Home
Getting ready for your Toronto real estate purchase can be daunting. You will have to keep many in things in mind such as credit score, mortgage, down payment and more. However, if you are armed with information, you can apply for a mortgage, shop for a home, or close the deal with ease and confidence. Below are some tips to help you deal with the home buying process more easily:
Determine the Amount of Home you can Afford
Before you make the purchase, ensure it is the right time to do so. Keep in mind that homeownership pays off financially when you live in it for a minimum of five years. Otherwise, renting might be a better option for you. Your mortgage lender will determine the amount of a home you can buy. But, you will know what you can afford based on your own financial situation. Do you have a steady job and a solid source of income? What about your credit history and score? Focus on keeping your total housing payment under 30% of your gross monthly income. You don’t want to end up living in a beautiful home but experiencing difficulty in fulfilling your financial obligations. Check out Toronto real estate listings for awesome home options.
Prepare your Finances
Before buying a home, you want to make sure you are financially qualified to purchase one. To ensure your qualification, you will need to have the cash to close, good credit, and a verifiable income. Here’s what you should do:
- Check your credit rating. Check your credit reports for errors. Improve your score by paying down credit card balances and not using them for a couple of months before applying for a mortgage. Also, do not apply for credit until you have closed on your new house.
- Save for the down payment. Depending on the kind of mortgage you are planning to get, you might need a 3.5% to %20% down payment. While saving for your down, do not be tempted to invest in the stock market with the money you will want to use in the next year or two. Also, do not underestimate the amount of money you will need. Save up for the closing as well.
- Prepare your documentation. When you are close to putting an offer on a house, start collecting documents you will need for verifying your finances on your mortgage application. These include bank statements, W2’s, employment certificates, tax return copies, and more.