Being pre-qualified for a mortgage is not the same as being pre-approved for a mortgage. Pre-approved means a lender has reviewed all of your financial information and they’ve stated how much they will lend you. Pre- approval will save you time and energy so you are not running around looking at houses you can't afford. Take the time to get pre-approved – research current interest rates and ensure you’re aware of any hidden fees.
Don’t make large purchases or move your money around in the six months before buying a home. If you apply for new credit cards, build up too much debt or buy a lot of expensive items, it’s entirely likely you will have a hard time getting a loan, so don’t take chances with your credit profile. Lenders want to see that you’re reliable and they want a complete paper trail.
Anticipating the housing market is impossible. Real estate is cyclical, it goes up and it goes down. The best time to buy is when you can afford it. If you try to wait for the perfect time, you’re probably going to miss out and cause yourself unnecessary worries.
There’s an old real estate adage that says don’t buy the most expensive house on the block. A better strategy, in any kind of market, is to buy the worst house on the best block. In this situation, improvements you make to the home will be almost guaranteed to give you a top return on your investment.
Most people just focus on their mortgage payments when calculating the cost of home ownership, but they also need to be aware of other expenses such as property taxes, utilities, strata fees, maintenance and the like. Make sure you budget for these costs so you’ll be covered and won’t risk losing your house.
Falling in love with a house can lead to bad financial decisions. There’s a big difference between your emotions and your instincts. Going with your instincts means that you recognize that you’re getting a great house for a good value. Going with your emotions is being obsessed with the paint color or the backyard. It’s an investment, so stay calm and be wise.
A home inspector’s sole responsibility is to provide you with information so that you can make a decision as to whether or not to buy. An inspector can alert you to health and safety issues, shield you from costly discoveries after you buy and provide a full scope of the maintenance and type of repairs that may be necessary. An inspection report can also help your insurance agent arrange the proper coverage.
Your opening bid should be based on two things: what you can afford and what you believe the property is worth. Make your opening bid something that’s fair and reasonable and isn’t going to totally offend the seller.
Offending the seller isn’t a great way to start negotiations, especially if you do buy the home and need to work with them on any issues that may arise.
Find out what your potential new neighbourhood is like at all times of day. Maybe there’s heavy traffic during commuter hours that you wouldn’t notice at other times of the day, or perhaps there’s a sports field nearby that hosts noisy events all summer. Do your drive to work from the new neighbourhood to be sure you can live with the commute.