Here is a great post on planning before you make one of the biggest purchases you will ever make in your life. If you don’t know exactly what you want, you could get stuck with a home that doesn’t suit your needs. To make matters worse, if you buy in a bad neighbourhood or on a busy street, you could have trouble selling the home when you want to move. Make sure you use an experienced realtor that can guide you through the fairly complicated process of buying a home.
Here is the article:
The thought of purchasing a home is something that is constantly on the minds of those without one. Sure, the apartment might be nice, but it doesn’t feel like it’s yours. Houses are definitely beneficial to well-being and happiness of potential buyers. A home sets the foundation of a family, which is important. Almost everyone knows that a family is what makes a home, so carefully planning your investment in your future is vastly important.
Without planning your purchase, you could be regretting your decision in the near future. Without a solid plan, and efficient time for that plan to take effect, the whole process could fall apart. The last thing you want to happen after finding a home you like is for that home to slip away from you. Even worse, you could not be able to afford your purchase and be forced to leave it behind.
What key parts of this plan should you include in yours? Well, when purchasing a home in Canada, there are multiple things to take into consideration, but the most important thing is to take your time.
Plan, Plan, Plan
Okay, so you’ve decided that you’re going to take this crazy idea of buying a home more seriously… Now what? Well, now would be a good time to get it all down on paper—or wherever you might take notes. Create a list of things you would need to have/do so this crazy idea can become a reality (BankRate).
Place the more important things at the top of the list, while leaving the bottom for things that could either be done quickly or can be done at a later time. How do you know the order those things should be placed? Well, a key part of planning is research, research, and research! Some potential candidates for your list will be covered later on.
You should wait until a few months prior to your purchase to look up your credit score for the first time. You should check your credit score every few months, but not too often. Checking your credit score too often can actually harm your credit score!
Look up your score and take note of anything that may be bringing your numbers lower than you’d like them to be. Whether it’s collections or credit card debt, it can all be taken care of a bit at a time. If your debt is looming over you, then increase the time span of your plan to purchase a home. It will end up saving you money in the long run, due to lower interest rates (BankRate). Be sure to get your report from a reputable company/website! Information that isn’t current will set you off course.
Another way to be proactive is by increasing the cash flow to your savings account. This will not only show how serious you are about this, but it will help you get into the mentality of a soon-to-be home owner! With the number in your savings account rising, your focus will increase and you’ll become an unstoppable home buying machine!
Plan Some MORE
At this point, you may either hate making lists or you will start to love them. Lists serve as visual incentive as to how far you’ve come along in this journey. The more items you cross off your list, the more that you need add, it seems.
The type of planning you should focus this time around is your finances. Look at how far along you’ve come with your savings and try and estimate how large this number will be by the time you’re ready to pull the trigger. Use that number to get another number, this time about what you believe you’ll be able to afford (BankRate).
Now, make sure you have a clear definition about what “afford” entails. You shouldn’t define afford as being able to purchase the home, but being left with close to nothing afterwards. Your financial plan should clearly define how much you’ll be able to spend on the down payment of the home, while still being able to afford any fee’s after the deal is closed. In addition to the fees, you should leave room for furnishing—if needed—and grocery money. Your plan shouldn’t stop at the day you purchase the home, but rather months, if not a year or so after (TheSimpleDollar).
Even if the money you’ll have available for the home might be less than you originally anticipated, this doesn’t mean you should lower your expectations about your future home. Having less doesn’t automatically require you to settle, but instead take some extra time to either consider different options or give yourself extra time to save.
It is highly recommended that any changes in savings, especially an increase in deposits to the account, don’t infringe upon your current financial responsibilities. It’s important that you find the balance between chasing your dream and holding everything together while doing so.
Again, Don’t Settle
When you feel forced into a purchase, due to numerous circumstances, this can lead to the resentment of your purchase. If you decide to go ahead with your search, although you have lower funds, you should still expect to find a house you really like. Canada is filled with beautiful and affordable homes, so the right one for you might be just around the corner! Keep a positive attitude and don’t stop looking until you’ve found the right home.
When you feel that you have completed your search, get your home inspected. It is important to pay attention during this inspection, because the financial responsibility behind repairing a home could be surprisingly costly. Once you’ve gotten your inspection, consider getting a second opinion (TheSimpleDollar). A fresh set of eyes could find something the previous inspector did not. If everything seems in order and you’re finally ready to set the purchase in motion, take some time to sleep on it. The home isn’t going anywhere, so if you wake up and you’re still sure then go for it!