5 Financial Tips to Prepare You for Buying Your First Home

It's likely the biggest purchase of your life, and it pays to be properly prepared financially before you even begin browsing houses for sale. Here are the top five things you can do to put yourself in the right position to make your homeownership dreams a reality.

There are many millennials who figure homeownership is out of their reach and unattainable in their lifetime. While this will always be true for a certain subsection of the demographic, proper planning and financial diligence can make the dream of owning one's own home much easier to obtain across all generations. 

Here are five financial tips to get you on the path to fulfilling your desire to own your own home. 

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5 Financial Tips to Prepare You for Buying Your First Home

Buying your first home is a major life milestone. It signals to the world that you are ready to take the next step towards a fun and exciting chapter in your life. Whether that chapter includes kids and a family or not is up to you, but being able to own your own house is a significant achievement nowadays.   

Making it to that point can be difficult. But with some planning and belt-tightening, it is possible. Here are the five things you need to do to make it happen and put yourself in the best position possible to buy your first place. 

1. Make Sure You're Ready to Buy a Home: You might think you're ready to buy your first home, but have you given the idea a lot of thought? Homeownership is much more expensive than renting a place. You have to consider property taxes, utilities, insurance, maintenance, and the unexpected costs that accompany owning your own home. If you still have a high debt burden, especially high-interest credit card debt, then it is probably best to pay it off before you move towards your goal of homeownership. 

2. Begin Saving: This is a bit of an obvious tip but it's worth hammering home. You will want to make sure you have the largest down payment possible, which will end up lowering your mortgage payments. Which could save you thousands of dollars throughout your agreement with your lender. Stocking away extra money on top of your down payment is a good idea too, as furnishing your new home and paying for repairs or maintenance that pop up in the first few years is inevitable. 

3. Build a Strong Credit Score: Chances are you will have to borrow money to buy your first home. While gifts from family are enormously helpful, unless they're bankrolling the entire transaction, you will have to reach out to a bank or mortgage broker to finance your purchase. And they will want you to have a stellar credit score before proceeding any further. This means making sure you pay your credit card and other bills on time and adhere fully to the agreements you have entered into. Make sure you are at least paying the minimum amount due every month, otherwise your credit score will take a severe hit. If you are looking for a way to build credit, try getting a couple of credit cards with a low limit and pay them off diligently.

WHAT MAKES A NEW CONSTRUCTION HOME BETTER THAN A PRE-OWNED ONE 
 

4. Get Pre-Approved for a Mortgage: Once you've determined you're ready to buy your first home and have a sizeable reserve of cash to pay for the down payment and additional costs, it's time to find out how much house you can afford. Head to your local bank or mortgage broker and have them run the numbers for you. After you know how much you can get a mortgage for, it will help greatly in narrowing down your search.

5. Be Realistic About What You Can Afford: Even if you receive pre-approval for a higher purchase price than you anticipated, you need to be realistic with yourself about what you can afford. Generally, this means keeping your housing-related costs below 33 per cent of your income. Anything higher, and you might quickly find yourself struggling to meet your mortgage payments and other financial obligations. Never mind saving for retirement.
 

Proper Planning Can Help You Purchase Your First Home

If homeownership is one of your main goals, then proper planning can help get you there. Make sure you follow the five tips above, and you will put yourself in the best position to make your homeownership dreams come true. If you already have completed everything on the list and are looking for a beautiful new home in one of Calgary's most sought-after neighbourhoods, then be sure to contact us today to book a showhome appointment.

Visit Our Calgary Showhomes Today

Are you looking for a beautiful, affordable home in a family-friendly neighbourhood? The Rise at West Grove Estates will allow you to enjoy planned green spaces, a well-established community, as well as close proximity to numerous high-end amenities. 

Our showhomes are available to view by appointment only. To find out more, please contact us at 403-250-5650 or fill in our online contact form.
 

FAQs

Q: Is it a good time to buy a house in Calgary in 2021?

Yes, Calgary is still considered to be a 'buyer's market' when it comes to homes and real estate. Continued economic headwinds and a high unemployment rate are the main contributing factors to this. 

Q: How much is a down payment on a house in Calgary?

You must put down at least 5 per cent for an insured mortgage. This means if a home costs $350,000, you will have to put down at least $17,500. 

Q: What is the average price of a house in Calgary?

The latest figures from the CREB show that the average price for a detached Calgary house (November 2020) is $537,737.