People looking to buy a new house need to take certain steps before proceeding. By taking these steps, they can improve their chances of being approved for a mortgage and obtaining a home they love. A new house is a wonderful thing, but only when the process is handled properly. We listed a few things to keep in mind when buying a home below to help you through this process! Check out our Buyer's Guide for a full list of all the steps you need to take!
1. What Is Needed In the Home?
Although this may seem obvious, many home buyers never stop to consider what they want in their new residence. As a result, they find it hard to narrow the available choices and become overwhelmed. This includes not only the location, such as a central or suburban area, but also the type of house. Is a condo preferred or would a single-family home be a better choice when children are desired in the near future? Take the time to determine this before proceeding.
2. Is Home Ownership The Right Option?
Determine the true cost of buying a new house. The mortgage payment is only one factor to take into consideration. Calculate anticipated property taxes, insurance, maintenance, and repairs. Doing so will also help to limit the choices, and the cost of living needs to be taken into account at this time.
3. Build or Buy?
Some individuals want a custom-built home, yet others prefer to buy a fixer-upper and do the work themselves. There are pros and cons associated with each option that need to be taken into account. If a fixer-upper is a possibility, buyers need to factor in not only the cost of the renovations but also the time needed to make any repairs. Where will the family live during this time, if not in the home, and how much will the home be worth once the repairs are complete? Take the time to determine this when choosing whether to buy a new house or build one.
4. Check Credit Scores
Credit scores need to be evaluated before applying for a mortgage. Individuals must ensure there are no surprises on their credit report and that they will qualify for a mortgage. Sadly, identity theft remains a problem in the country today, and this simple step can save a great deal of time and effort on the part of the buyer. In addition, any negative items on the report can be addressed before the mortgage application is submitted.
5. Know your Debt-To-Income Ratio
Lenders look at a borrower's income-to-debt ratio when reviewing a mortgage application. Conventional loans typically require a debt-to-income ratio of less than 28 percent of gross monthly income. For FHA loans, this figure cannot be more than 31 percent of gross monthly income. With these guidelines, borrowers can determine how much home they can truly afford.
Now may be the time to buy a new house, but only when these and numerous other steps have been taken. Preparation is key to a successful home purchase. Don't rush the process for the best results.
With some of the lowest commissions in Canada and professional insight, we at Qube Realty provide our clients with the most valuable full real estate service possible. Qube supports Quebec residents by providing full-service real estate experiences with incredible rewards: sellers save thousands in commission and buyers receive cash back when they purchase a home with one of our REALTORS®. All you have to do is visit our website here or call 1-877-410-7823 to learn more.