Preparation is key, no matter where you are in life. When it comes to real estate, knowing how to prepare to buy a house is paramount. With an investment this big, you need to know the right place to start – and the right set of circumstances that will result in a successful purchase.
Set yourself up for success, learn how to prepare to buy a house by following these steps……
1. Your Savings
How much money do you have saved up? Typically, the amount you’ve put away will be a determining factor in how successful you are in purchasing your dream home. Your savings work in multiple ways: you can increase the size of your down payment, mitigate closing costs, or finance repairs or improvements to your new home. As home prices change in Toronto, a good rule of thumb is to have 20% of the home’s sale price as your down payment. This is typically a safe way of avoiding any issues down the road, specifically with mortgages and interest rates.
2. Your Debt
To fully understand how to prepare to buy a house, know that the amount of debt you have is just as influential as your savings. Before you can confidently buy a new home, you need to be able to minimize the “weight” of your current debt. Not only will it help put you in a “power position” to buy, but it can save you a lot of headaches – and stress – from trying to balance your budget down the road.
3. Your Credit Score
Your credit score most often determines what you can – and cannot – afford in a new home. A credit score between 600 and 750 is average, but above 800 is considered excellent. Keep a close eye on your score, and any activity involved therein so that you can build a solid foundation when it comes time to visit a lender. In order to improve your score, try to clear as much debt as possible, make payments quickly and in larger amounts, and avoid opening new credit cards that you won’t need. To put it simply: Manage the debt you have and avoid creating more.
4. Your Pre-Approval Status
Speaking of lenders, figuring out how much you have been pre-approved for is great when learning how to prepare to buy a house. It gives you the opportunity to know just how much you can afford so that you can budget properly. Once you figure out how much money you have been pre-approved for, you can set up targets to find the home that hits the mark.
5. Your Neighbourhood Knowledge
Your budget is going to tell you a lot about what you can afford, but do you know where to find the ideal home? Understanding your purchasing power is key, but knowledge of the surrounding communities will help put that power into practice. Do a little bit of research into where you want to live and follow it up by finding neighbourhood experts who can provide even more valuable insight. We will even help you get started, with neighbourhood guides that paint a well-rounded picture of some of Toronto’s most in-demand areas.
6. Your Local Specialists
The final preparation: working with the right team who can handle the rest. We know how to prepare to buy a house because we have been doing it successfully for so long. Once your finances in order and you have a general idea of what you want, we will get you more of the area expertise, the negotiating skills, and the attention to detail that gets results.
Are you prepared to buy? For over 30 years, our clients have trusted us to minimize risk, offer unbiased opinions, and ensure their best interests are served. We can do the same for you. Contact our team today to talk about your needs by emailing us at niels@christensengroup.ca or calling us at416-441-2888 ext. 761.
