Getting the preapproval for your mortgage is very important and means you are one step closer to owning your own home. But before you make an offer to the seller, consider doing the following three things:
Set a realistic budget
Your mortgage is not the only expense you will have when buying your home. There are a number of other costs that are involved that will impact your financial situation:
- Closing costs – lawyer fees, home inspection fee, appraisal fees, land transfer taxes, mortgage default or Canada Mortgage and Housing Corporation insurance are some of the notable closing costs.
- Fixed costs such as home insurance, property taxes, strata fees, should be added to your budget.
- Immediate updates to the home such as replacing the floors in certain rooms, upgrading some appliances to more energy efficient ones.
Plan for unexpected events
Owning a mortgage is a big deal. It’s comparable to paying rent, but with a mortgage you are paying towards ownership of your home. With rent, you are giving money to the homeowner who uses the rent towards ownership. What happens if you cannot pay your mortgage due to some unforeseen circumstance?
You need to protect your home by:
- Insuring your mortgage balance with a personal insurance coverage – life, disability, and critical illness.
- Setting up an emergency fund to cover the fixed expenses for at least 6 months.
- Earn extra income to help cover the expenses.
Make a list of tasks that need to be done
Once you have done the above, you need to find a suitable home. Here are the necessary steps that are required:
- Make the offer with your realtor
- Decide on closing date, possession date, and other contingencies
- Negotiate and sign the agreement
- Get an appraisal and home inspection done
- Pass on the documentation to the lender
- Get the necessary mortgage insurance
- Pay the down payment
- Pay the other closing costs
Today, buying a home in Vancouver requires a sizeable investment. We have a very experienced and knowledgeable group of real estate professionals available to help you. Call us on 604.913.1000 or email us with any questions you may have about the market or real estate in general.