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Mistakes To Avoid As A First Time Buyer

10 June 2022by shaunna0

Are you a first-time home buyer looking to jump into the real estate market? But you’re scared that you might make a mistake along the way. Well if so, I’m going to be going over 8 common first time home buyer mistakes. And how you can avoid making them. 

Now, this is a 2-part video series so in this video I will be going over tips #4-8. So, if you haven’t seen part 1, hop over to that video after to get all 8 tips.

If we haven’t met before, my name is Shaunna McIntosh and I am a top producing real estate broker who helps first time home buyers navigate the ever-changing Ottawa real estate market. Alright, let’s jump on in! 

FIRST TIME HOME BUYER MISTAKE #5

Fixating on aspects of the home that can vs. can’t be changed.

All too often, I speak with buyers about what they are looking for in a home and instead of focusing on things that can’t easily be changed, like the neighbourhood, school district or the yard size. Instead, they fixate on things that can be upgraded over time like the paint colour or cabinetry and countertops. 

Instead of focusing on things that can be updated over time, focus more on the things that you can’t change like the neighbourhood. 

FIRST TIME HOME BUYER MISTAKE #6

Thinking that you need a minimum of a 20% down payment to buy a home. 

In most cases, this simply is not true. Although having at least 20% down will help you avoid paying mortgage insurance premiums and will lower your monthly mortgage costs. But the decision the wait and save more or buy now should be well thought out. 

For example, let’s look at the past couple years… let’s say in 2020 you had 10% saved for a down payment and were thinking about buying in the Ottawa area. But you decided that you didn’t want to pay the mortgage insurance premium so you decided that you were going to keep saving until you had 20% down… well fast forward 2 years, and the pace of the housing market and home appreciation would have likely outpaced the savings you would have accumulated. 

Hind sight is 20-20. But looking back now, the better move in most cases, would have been to buy with less than 20% down. This is because you would have made more money in the home increasing in value vs. the mortgage insurance premium that you would have paid and the slightly higher mortgage payments. 

Now I do want to caveat this point… whether you wait to save the 20% or decide to buy now, should be a strategic decision. It should be based on current market conditions and short to medium term market forecasts in your area. 

So, do some of your own research and speak with your realtor or mortgage broker about this in order to get some more insight. 

FIRST TIME HOME BUYER MISTAKE #7

Not saving money for your closing costs. So, you’ve got your down payment saved, and you’re ready to pull the trigger on your new home. But WAIT! Before you start submitting offers, make sure that you have a little nest egg set aside. This will help with the inevitable costs that come along with buying your first home. 

Things such as lawyer fees, disbursements, land transfer tax, appraisals and moving costs just to name a few. Closing costs can quickly add up. So, speak with your realtor and mortgage broker about how much you should have set aside for these expenses.

FIRST TIME HOME BUYER MISTAKE #8

Taking out any type of loan or maxing out your credit cards before you take possession of your new home. 

So, you think you did everything right. You got the pre-approval, you selected a good realtor, submitted an offer and you got the house! Congratulations, that’s amazing!

 But you are not done yet….

You want to make sure that your credit score and your income to debt ratios maintain the same or get better between the time that you get the mortgage pre-approval and the time you actually take possession of the home. If your lender finds out that you maxed out all of your credit cards or financed a brand new car right before taking possession, this could put your mortgage approval in jeopardy. So, no matter what you do, be very conscious of your credit and your debt load until you close on the home. 

IF YOU MISSED IT, CHECK OUT PART 1 FOR TIPS #1-4!

Are a first time home buyer in the Ottawa area? Be sure to check out part 1 of this 2 part video series to get tips number 1-4. Have any questions? Feel free to reach out anytime. I would be happy to answer any questions about buying your next home, selling your current property or about the Ottawa real estate market! 

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Are you a first-time home buyer looking to jump into the real estate market? But you’re scared that you might make a mistake along the way. Well if so, I’m going to be going over 8 common first time home buyer mistakes. And how you can avoid making them. 

Now, this is a 2-part video series so in this video I will be going over tips #4-8. So, if you haven’t seen part 1, hop over to that video after to get all 8 tips.

If we haven’t met before, my name is Shaunna McIntosh and I am a top producing real estate broker who helps first time home buyers navigate the ever-changing Ottawa real estate market. Alright, let’s jump on in! 

FIRST TIME HOME BUYER MISTAKE #5

Fixating on aspects of the home that can vs. can’t be changed.

All too often, I speak with buyers about what they are looking for in a home and instead of focusing on things that can’t easily be changed, like the neighbourhood, school district or the yard size. Instead, they fixate on things that can be upgraded over time like the paint colour or cabinetry and countertops. 

Instead of focusing on things that can be updated over time, focus more on the things that you can’t change like the neighbourhood. 

FIRST TIME HOME BUYER MISTAKE #6

Thinking that you need a minimum of a 20% down payment to buy a home. 

In most cases, this simply is not true. Although having at least 20% down will help you avoid paying mortgage insurance premiums and will lower your monthly mortgage costs. But the decision the wait and save more or buy now should be well thought out. 

For example, let’s look at the past couple years… let’s say in 2020 you had 10% saved for a down payment and were thinking about buying in the Ottawa area. But you decided that you didn’t want to pay the mortgage insurance premium so you decided that you were going to keep saving until you had 20% down… well fast forward 2 years, and the pace of the housing market and home appreciation would have likely outpaced the savings you would have accumulated. 

Hind sight is 20-20. But looking back now, the better move in most cases, would have been to buy with less than 20% down. This is because you would have made more money in the home increasing in value vs. the mortgage insurance premium that you would have paid and the slightly higher mortgage payments. 

Now I do want to caveat this point… whether you wait to save the 20% or decide to buy now, should be a strategic decision. It should be based on current market conditions and short to medium term market forecasts in your area. 

So, do some of your own research and speak with your realtor or mortgage broker about this in order to get some more insight. 

FIRST TIME HOME BUYER MISTAKE #7

Not saving money for your closing costs. So, you’ve got your down payment saved, and you’re ready to pull the trigger on your new home. But WAIT! Before you start submitting offers, make sure that you have a little nest egg set aside. This will help with the inevitable costs that come along with buying your first home. 

Things such as lawyer fees, disbursements, land transfer tax, appraisals and moving costs just to name a few. Closing costs can quickly add up. So, speak with your realtor and mortgage broker about how much you should have set aside for these expenses.

FIRST TIME HOME BUYER MISTAKE #8

Taking out any type of loan or maxing out your credit cards before you take possession of your new home. 

So, you think you did everything right. You got the pre-approval, you selected a good realtor, submitted an offer and you got the house! Congratulations, that’s amazing!

 But you are not done yet….

You want to make sure that your credit score and your income to debt ratios maintain the same or get better between the time that you get the mortgage pre-approval and the time you actually take possession of the home. If your lender finds out that you maxed out all of your credit cards or financed a brand new car right before taking possession, this could put your mortgage approval in jeopardy. So, no matter what you do, be very conscious of your credit and your debt load until you close on the home. 

IF YOU MISSED IT, CHECK OUT PART 1 FOR TIPS #1-4!

Are a first time home buyer in the Ottawa area? Be sure to check out part 1 of this 2 part video series to get tips number 1-4. Have any questions? Feel free to reach out anytime. I would be happy to answer any questions about buying your next home, selling your current property or about the Ottawa real estate market! 

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