What You Should Know About the Home Buying Process in St. Albert
You've finally decided it's time to move up in the world. It's time to start shopping for a new home.
However, the home buying process can be a little overwhelming if you don't know what you're doing. Some people say buying real estate is one of the most stressful things you can do as an adult.
There are all the financial details, paperwork, negotiations with sellers, and more. If you fall in love easily (with real estate), you may also experience the emotional ups and downs of finding an amazing home and being forced to let it go.
Whether you're looking for your first home or are ready to get into a different place, we can help make your life easier. Keep reading for everything you need to know about the home buying process in St. Albert.
Know Your Finances
First, understand that homeowners have a lot of financial responsibilities (covered below). As such, you need to have an intimate knowledge of your finances.
How much money do you make each month? How much money is already dedicated to things like bills, credit cards, personal loans, and auto loans? How much money do you spend in general for things like groceries, gas, entertainment, hobbies, health, fitness, etc.?
Dig through your budget and decide how much you can afford to spend on monthly mortgage payments without putting yourself under financial strain. This may be a good time to purge your life of unnecessary expenses such as dining out, commercial coffees, unused gym memberships, online shopping, and more.
Know Your Home Loan Eligibility
The next step of the home buying process is to get pre-approved for a mortgage for a home in St. Albert or Edmonton. What you can afford and what lenders believe you can afford might be two different things. It all comes down to your credit report.
If you have poor credit or limited credit history, you may not qualify for certain loans. Your credit score also affects the rates and terms you can get. The higher your credit score, the more favorable your interest rate will be and the more money you will be eligible for.
If you can't get approved for the loan you want, it might be a good idea to take a step back and spend a few months boosting your credit score. You may also benefit from getting a co-signer for the home, assuming they have a higher credit score.
Know the Costs Involved in Home Ownership
Now that you know your personal finances and how much you can get approved for, there's one more financial factor to consider before you start the home buying process.
Owning a home isn't just about making monthly mortgage payments. There are quite a few more expenses that come along with being a homeowner. For example:
- Homeowners insurance
- Property taxes (depending on where you live)
- HOA fees (if applicable)
- Utilities (electric, gas, water, waste removal)
- Services (internet, cable, phone)
- Home maintenance and repair
Finally, don't forget about saving for a down payment. Depending on the type of loan you're trying to obtain, you could be required to pay anywhere from 0% to 20% upfront.
Knowing all of your expenses as a homeowner is vital. Many people over-extend themselves and opt for the highest possible home loan. This has the potential of creating financial hardships in the future.
Iron Out Your List of Priorities
As a home buyer, you need to identify the most important priorities of your next home. This includes things like size, location, features, and more.
If you have children (or plan to in the future), you need to think about what school district the neighborhood falls under. You may also want a home that's nearby to parks and playgrounds. For a family home, neighborhood safety should also be a top concern.
If you're concerned about your daily commute, you may want a home that's closer to your place of work. An extra 15 minutes both ways can take a lot of time out of your day.
Finally, think about the characteristic of the home.
How many rooms and bathrooms do you want? Do you want a large kitchen and dining area for entertaining? What about outdoor features like patios, decks, fire pits, fenced-in yards, or outdoor kitchens?
Hire an Experienced REALTOR®
One of the best ways to find the right house for a great deal is by hiring an experienced real estate agent. They will have access to all the major listing agencies. As such, they'll be able to find you exactly what you're looking for based on your parameters.
Furthermore, an experienced Edmonton or St. Albert REALTOR® will help you make an offer on a home and negotiate with the seller. They can push things to lean in your favor and provide valuable advice, even if it means telling you to walk away.
Overall, working with a REALTOR® makes the home buying process more efficient and less stressful. It's good to have a professional on your team.
Know What Not to Do During the Closing Process
Finally, just because you get approved for a loan and the seller accepts your offer, it doesn't mean you're out of the woods. Closing on a home usually takes 30 to 45 days.
During this time, it's absolutely vital that you don't change anything at all about your financial status. Under no circumstances should you:
- Change your employment status or get a new job
- Take out a credit card
- Take out a loan
- Apply for any kind of credit
- Do anything that lowers your credit score
One wrong move, no matter how small, has the potential to disqualify you from a loan that's in underwriting. It's not unheard of for a deal to fall through days before closing. Wait until after the house closes before you take out a new credit card, change jobs, buy a new car, finance furniture, etc.
Get Ready to Start the Home Buying Process in St. Albert
Whether you're about to be a first-time homeowner or are looking to get your second, third, or 10th house, we can help. The home buying process isn't always easy, but it doesn't have to be stressful and difficult either.