If you’re planning to purchase your first home, it is important to get on top of your finances well before you start looking. On top of understanding your savings and budget limitations, this process can also help you prepare before applying for a mortgage.
Before sitting down with a real estate agent or a mortgage lender, check your credit. Your credit score will determine whether you’ll qualify for a mortgage and affect the interest rate that lenders will offer. You can get a free copy of your credit report from certain credit bureaus, as well as some online banking apps. To help strengthen your credit, pay off all your bills and keep your credit card balances as low as possible.
In addition to making sure your credit score is in shape, you will also need to consider the savings you’ll need on-hand for a down payment. You should plan to put down at least 20% of the full purchase price, which can seem very difficult at first, but making small changes in several aspects of your lifestyle can really help. You’ll need to prioritize and potentially cut back on things like expensive vacations, the latest technology, or eating out frequently. When putting money away, consider placing it in a Tax-Free Savings Account (TFSA) where you won’t have to pay income tax on it as it grows.
Once you’ve established your credit and put enough money away for a down payment, you can shop around for mortgage rates and obtain a pre-approval. Obtaining a mortgage pre-approval not only gives you a set budget, but it makes you a more attractive buyer and may allow you to close faster.
When you begin to browse for a home, consider choosing Starlane. We have years of experience building master-planned communities in prime locations. For priority updates on our coming-soon communities, register online.