Buying Your First Home in the Greater Toronto Area

14 November 2019
Ela Napiorkowski

Buying your first home: a couple imagines the floor plan of their new home.

2020 is your year. It is the year you will buy your first home. 

Buying your first home is both an exciting and stressful milestone in your life. It is filled with dreams and wonderment, worry and trepidation.  Like anything we do for the first time, buying your first home is a new process with a lot of new procedures, search parameters, and a unique language onto its own. An experienced real estate agent, like myself, can be an invaluable asset in this process. Let me, Ela Napiorkowski, broker for RE/MAX Professionals Inc. Brokerage, share a list of items that you should accomplish before starting the actual hunt for your first home.

The Importance of Your Credit Score for Buying Your First Home

From the moment you obtained your student loan and your first credit card, you were developing a credit history. Your credit history gives you a credit score, which ranges from 300 to 850: the higher the number, the better the score. And the better the score, the better the rates you will be able to apply for while shopping for a new mortgage.  A rating above 740 is an advantageous score to have. Always treat credit accordingly, as it follows you everywhere. Knowing what your score is in advance of searching for your first home is paramount to you being able to budget appropriately and understand where in the market you should be looking.

Buying Your First Home Means it’s Nickel and Dime Time

You have the credit score in hand and you have diligently saved the appropriate amount for a down payment, so time to rest, right? Not at all. Now is in fact the time to continue to beef up the slush fund for the new home. The down payment is only a portion of the initial expenses when purchasing a home, and you will want to additional savings to account for the extras. Additional costs might include payments for land transfer taxes, home inspections, mortgage application costs, and lawyers’ fees, just to name a few. It is therefore important to start an incidental fund to help offset these fees.

Forecasting Your Budget for Your First Home

Taking some time to examine housing prices, your income, and interest rate increases will help you understand how this will affect your debt load. Doing the research in advance, and understanding the language and roadblocks that might pop up along the way will go far in determining your potential monthly mortgage payments. Take a look at an online mortgage calculator for a rough estimate you can create a budget around.  This is certainly not the time to acquire a new credit card or negotiate a bank loan, as both would be added to your debt load, and could be considered in the mortgage application evaluation.  Make sure that you are not late or negligent on any existing payments due as well.

Look for Financing

You have taken the time to crunch the numbers and find out what is possible for you and your budget. The next step is to find a mortgage lender. The first place to start looking is at your current bank.  They will either offer their assistance or may point you in the direction of lenders that they trust. Make sure that you ask about first-time buyer incentives, length of approval time, and for information on all fees that would be involved. Make sure that you have all necessary documents available to cut down on the approval time. A preapproval allows you to act quickly when that perfect property presents itself, so acquiring one is time well-spent.

Your Real Estate Agent

Meet your new best friend. Your real estate agent is someone you are placing a lot of faith and trust in. Ask for referrals from your friends and family, and look for referrals for agents in your area. Don’t be afraid to shop around for an agent that you feel comfortable with: home-buying is one of the most important events in your life, and you need to have a great working relationship with your agent. Call me, Ela Napiorkowski, broker for RE/MAX Professionals Inc. Brokerage, (416) 841-2356. I will be more than happy to assist you with buying your first home.