A home isn't just a place to live. It's a place to build your future and just might be the biggest purchase you'll ever make.
RBC Royal Bank research shows that among those likely to buy a home within the next two years, close to half (47%) will be first time home buyers and two thirds are between the ages of 18 and 34 years old.
Experts offer a number of tips to help first time homebuyers:
Determine how much you can afford
Before beginning your new home search, review down payment options, household income, current debt, estimated monthly housing-related costs and closing costs. To help you plan, take a look at the helpful tool called "How Much Home Can I Afford" at rbcroyalbank.com/mortgageaffordability.
Create your wish list
Determine what features are need-to-have versus what are nice-to-have.
Review your savings
Establish a down payment amount you are comfortable with before making your purchase. There are options available depending on how much of a down payment you can afford.
Get pre-approved for a mortgage
If you are unsure you qualify for a mortgage, or for how much, speak with a mortgage specialist to find out your options. This link may be helpful: https://mortgage.rbc.com
Factor in your closing costs
It helps to know upfront what your closing costs will be. When calculating closing costs, it's fairly safe to assume you'll need at least an additional 2% to 2.5% per cent of the purchase price.
When you're buying a home for the first time, there are a number of related costs that you may not be familiar with, including: professional home inspection, lawyer fees, land transfer tax, property tax and property insurance. Also take into account "one-time" costs, such as moving expenses, and ongoing costs, such as heating, electricity and water.
Understand your payment options
Many first-time homebuyers give more thought to interest rates than the mortgage solution itself. While rates certainly have to be considered, the different types of mortgages, various payment structures, terms and flexibility may have a much greater impact on your overall costs of homeownership.
Be realistic
You may be under or overestimating how much you can afford for a home. Online mortgage calculators make it easier to estimate accurately by providing you with information on the maximum mortgage payment you can afford each month.
Love your new home
Once you've received the keys to your new home, it will be time to sit back and enjoy every minute of being a homeowner. Enjoy!
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