Buying your first home is exciting, and it is also a long list of decisions made quickly. Here is the checklist I walk every first-time buyer through before we book a single showing.
1. Get pre-approved, not just pre-qualified
A pre-approval means a lender has looked at your income, debts and credit and is prepared to lend up to a set amount at a held rate. In Canada you also need to pass the mortgage stress test, so the number you qualify for is usually lower than the number a quick online calculator suggests.
2. Know the down payment rules
For a home under $500,000 the minimum down payment is 5%. Above that, it is 5% of the first $500,000 and 10% of the rest, up to $1.5 million. Put down less than 20% and you will pay for mortgage default insurance, which is added to your mortgage.
3. Budget for closing costs
Alberta has no land transfer tax, which is a real advantage over other provinces, but you will still pay land title and mortgage registration fees, legal fees, a home inspection, and possibly a property tax adjustment. Setting aside 1.5% of the purchase price is a sensible starting point.
4. Look past the paint
Edmonton winters are hard on houses. On a detached home I look closely at the roof, the furnace and hot water tank, grading around the foundation and the age of the windows. On a condo, the reserve fund study and the board minutes matter more than the countertops.
5. Pick neighbourhoods, not just houses
Drive your future commute at rush hour, walk the street after dark and check the transit route. My neighbourhood guides are a good place to start.
Ready to talk it through? Get in touch and we will build your plan together.
