6 Questions to Ask If You’re Thinking About Buying Your First Home

Buying your first home is exciting — but it can also be overwhelming. Since buying a home is such an expensive purchase, you cannot afford to make any mistakes. Know exactly what you’re getting into by asking some key questions.

1. What Is Your Budget?

Searching for homes and then figuring out if you can afford a property you like puts you at risk for disappointment. A better approach is to figure out your budget from the start. This involves considering your income, debt, and monthly expenses, including bills, insurance premiums, food, and transportation costs.

2. How Much Down Payment Can Your Afford?

The larger the down payment, the less you’ll need to borrow. However the minimum down payment is 5% of the purchase price if you are purchasing a home to reside in.  If you’re able to make at least a 20-percent down payment, you can avoid high ratio mortgage default insurance premiums.

3. What Are the Costs of Homeownership?

Bear in mind that homeownership may come with additional expenses. This includes repairs and maintenance that your landlord likely covers if you’re currently renting. You may also need to pay a monthly membership fee to a homeowner association.

4. What Will I Pay in Property Taxes?

One other additional expense that comes with homeownership is property tax. Always ask your real estate agent how much property tax to expect on a home before you even consider purchasing. Sometimes, property tax estimates will also be included in the listing. 

5. How Much Are the Closing Costs?

When you purchase a home, in addition to the cost of the property itself, you’ll need to pay closing costs. These can include a home inspection, lawyer fees, a title search, a pest inspection, real estate fees, an appraisal, loan origination, and a home warranty.  Mortgage lenders require you to have at least 1% to 1.5% of the purchase price in your bank account to cover your closing costs.  Yes, this is in addition to the minimum 5% down payment.  

6. How Much Will It Cost to Move?

Finally, you’ll incur expenses from the move. In addition to the cost of the moving service and boxes, you’ll need to purchase more furniture if you’re moving into a larger space.

Once you’ve figured out the answers to these questions, it’s time to work with a mortgage broker . Edmonton and area homebuyers can turn to Flare Mortgage Group. Our team of brokers will help you every step of the way to becoming a new homeowner. Contact us to get pre-approved today.