Purchasing your first property is an achievement and a very exciting process! However, since it’s likely one of the largest transactions you’ve ever completed, there are a few things to think about when purchasing property.
Contrary to popular belief, the process of purchasing a home doesn’t have to be overwhelming.
So, if you’re at a stage where you think you are ready to offer on a property, there are some things that you should consider before signing on the dotted line.
1. Careful Budgeting for the Future Is Essential
The first step to purchasing property is planning your budget. It is important to not only consider your current financial circumstances, but also your future costs and credit. This way, you can calculate how large of a deposit you can comfortably put down and what monthly mortgage payments you can afford.
During the budgeting stage, you will also want to consider what existing debts you can pay off. The less debt you owe, the more you can increase your borrowing power with lenders. For example, if you have existing debts such as a credit card or student loan, you might find it harder to get a mortgage approved, or you may not be able to borrow as much as anticipated.
So, you may want to consider focusing on reducing debt as much as possible before you apply for a mortgage.
You should also be prepared for any additional expenses that may arise when buying a home, such as moving expenses, mortgage application fees, property transfer tax, and inspection costs.
2. Consider All Your Mortgage Options Before Settling
The lending market is relatively complex and competitive, which is why it is a good idea to compare a range of different mortgage products to ensure you are getting the best interest rate and terms for your financial circumstances and goals.
There are several mortgage options you should explore, such as whether to choose a variable or fixed-rate mortgage. There are also many different types of mortgages to suit different situations – it is just a matter of finding the right lender and product for you and your situation.
One way to find the right mortgage product for your specific situation is utilizing the professional services of a mortgage broker. They can provide expert advice on all your borrowing options and guide you through the loan application process.
3. Check If You’re Eligible for ‘First Home Buyer’ Grants
As part of your research and planning stages, you should see if you are eligible for ‘first home buyer’ grants or property tax concessions.
In British Columbia, the government offers a first-time home buyer’s program which helps reduce (or even eliminate) the amount of property transfer tax you have to pay on your new purchase. There are, however, a number of qualifying criteria you need to satisfy in order to be eligible for the tax exemption. These include:
- fair market value of $500,000.00 or less;
- being a citizen or permanent resident of BC;
- having lived in BC for at least 12 consecutive months (or filed two income tax returns);
- purchasing property located in BC; and
- using the property as your main residence
You may qualify for a partial exemption if the property has a fair market value of $525,000.00 or less.
For more information on the first home buyer concessions, visit the BC Government website.
4. Get Pre-Approved for Mortgage
If you are serious about buying a property, you should consider obtaining mortgage pre-approval as the first step of the purchasing process. This will give you a clear idea of what you’re able to afford based on what a lender is prepared to lend you.
5. Start Doing Your Due Diligence
Once you’ve obtained pre-approval for your mortgage, you can start looking for the home you want to buy. During this stage of the process, you should ensure that you explore the full range of options regarding where you will live and the kind of property you want and can afford.
There is no such thing as being too informed when it comes to purchasing property, so take your time to learn as much as you can about the areas you’ve identified as having potential. If you need help gathering some of this information, it is a good idea to speak to real estate agents who work in the area.
6. Don’t Miss Out on Home Inspections
Once you have found your ideal property, make sure to have a professional home inspection completed. This will alert you to any serious issues that you may not be able to determine on your own. Those issues could include water ingress, termites, asbestos, ventilation hazards, electrical issues, and plumbing problems.
Without an inspection, you may run into issues after already completing the purchase and moving in, which could require expensive repair work.
7. Contact A Reputable Conveyancing Firm
It is important to remember that there are various specific steps that need to be followed from a legal standpoint to ensure the transaction completes successfully. When you buy or sell real estate in BC, it is important that you work closely with a lawyer or notary so that they can guide and assist you through the conveyancing process.
Solimano Law provides competitive rates for conveyancing legal services for both buyers and sellers in residential real estate transactions. Our team can assist you with:
- Purchase and sale transactions.
- Mortgages and refinancing.
- Charges and discharges.
- Other residential real estate matters.
If you have any questions regarding the conveyancing process or need to engage the services of a real estate lawyer, contact the Solimano Law team today.
Disclaimer – The information contained herein is of a general nature. It is not intended to be legal advice and it is not intended to address the exact circumstances of any particular individual or entity. No one should rely on or act upon such information without receiving appropriate professional advice and without a thorough examination of their particular situation. Please contact our office if you have any questions with respect to the content of this entry, this website, or our Terms and Conditions .
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