When delving into the realities of home ownership, there can be many factors involved that make it difficult to determine what you need to know and what can wait until later. If you happen to be a first-time buyer who’s looking for the best tips for purchasing a home, the following three pointers can help to set you on the right path.
Get Familiar With Your Credit Score
If you haven’t looked at your credit report for a long time, it can be a daunting task to request this information. Fortunately, your credit report is free and you can do it online at sites such as Borrowell, Credit Karma Canada, Equifax Canada and Transunion Canada. Accessing these online programs will not affect your credit rating and it is important to know that when a bank or other lending agencies check your score, it will affect your credit rating. It can be a good way to prepare you for what lenders are going to see. By taking this important step, you will be able to determine any delinquent accounts or balances owing that have gone to collections, and hopefully have these cleaned up before they can become a problem for your mortgage.
Determine The Price You Can Pay
While you may have a price in mind for what you’re willing to pay for a home, it’s important to determine your Total Debt Service Ratio before putting in an offer. Your TDS ratio can be determined by calculating a formula that can be accessed at www.cmhc-schl.gc.ca Within this site there is very valuable information about buying a home and if you are in need of being qualified through Canada Mortgage Housing Corporation (CMHC)
Organize Your Housing History
If you have a good history as a tenant, the next step will probably be the easiest of all, but it’s very important in order to prove you’re a responsible candidate for home ownership. Once you’ve acquired a Verification of Rent from any applicable landlord in the previous year, you’ll want to ensure that you have money in the bank. While RRSP’s can make a good impression, having a cash downpayment is extremely helpful to not only take your payment down a little but also determines whether you require assistance from an institution such as CMHC.
There are a lot of things to know when it comes to buying a home, but if you’re a first time buyer the most important thing is to ensure that your finances are organized and that you’re not diving into more house than you can afford. By taking the time to determine your Total Debt Service Ratio and looking into your credit, you can ensure a positive first-time buying experience. If you’re wondering about homes for sale in your area, please feel free to contact us. We would love to sit down and chat with you about your dream home.