1. Get your background in order. This means knowing your credit score, and possibly even having pre-approval from your mortgage company. You should also have all your documents in place to be approved for a mortgage – it makes the process much quicker.
2. Know your budget and do not look at houses over that amount. Know exactly how much you can afford to put down for a deposit, and what you can afford for monthly mortgage payments, insurance, and homeowners fees. Do not be swayed from those figures. If you look at a house more than you can afford and fall in love with it, you’ll either have to come up with the extra cash up front, or have your heart broken..
3. Don’t buy for your life today – think about the future. If you’re single, you could get married and need to decide if your house will be sold, if it will remain in your name, or if it will be split if you divorce. When you buy a house with someone who is not your significant other, make sure you have a clear exit plan in case things go south.
4. Look beyond the cosmetic fixes. It’s fairly inexpensive to repaint a house and change the carpet, but making bigger changes, like to bathrooms and kitchens, can get expensive – quick. Factor in the costs of those things if you buy a fixer – they’re often much more than you estimate.
5. Look beyond the purchase price. The mortgage payments are just the start of owning a house. Be sure to consider the cost of insurance, homeowner association fees, taxes, and maintenance and upkeep for things like gardens and swimming pools.
6. Know the neighbourhood. For investments, it is much better to own the worst house in a good neighbourhood than the best house in a bad neighbourhood. Look at the quality of schools if you have or want children, and look at local amenities. A community without a good grocery store will leave you frustrated within a year.
7. Remember you don’t have to buy a house. It’s a big decision and it isn’t for everyone. If you’re happy renting, continue renting. You can preserve cash and remain mobile – many young professionals are taking this route.