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Tips for First Time Homebuyers - GMFS Mortgage - first time home buyers canada

Tips for First Time Homebuyers - GMFS Mortgage-first time home buyers canada

Tips for First Time Homebuyers
NOTE: See other page for Interactive Budget Worksheet
Start saving for your down payment as early as possible Check your credit score
Even though there are many options that allow as low as a 5% down payment, Your credit score is one of the key factors in determining what type of mortgage
it is significantly better to have more money up front than less. Be sure to know and the interest rate for which you qualify. As soon as you know you may want
how much home you can afford before determining how much money you have to buy a home, begin work on your credit score. Dispute any errors on your
to save. If you plan to only save 5% of your down payment, keep in mind that credit report and get them resolved as quickly as possible. Also, do not open
5% of $200,000 is $10,000. In addition, putting down less than 20% may mean any new accounts within at least six months of applying for a mortgage.
higher costs and paying for private mortgage insurance (PMI). Know how much
down payment you need, set a goal, and work hard to reach that goal.
Budget for closing costs
Whether you plan to pay for the closing costs up front or are planning to roll Budget for move-in costs
them into your mortgage, you need to have an idea of how much your closing In addition to insurance, inspections, home title, real estate agent's commission,
costs will be. Be sure to do some research yourself and shop around and and all of the other costs involved in buying a home, many people forget that
compare prices for certain closing expenses, such as homeowners insurance, the actual moving process costs money. Be sure to save enough money for
home inspections and title searches. Also, never be afraid to ask the seller to things such as cleaning supplies, food to restock your cabinets and refrigerator,
pay for a portion of your closing costs or negotiating your real estate agent's new rugs, paint, and anything that you would like to change cosmetically to the
commission. Closing costs typically run between 2%-5% of the total loan home.
Know what type of property you want to buy Research Mortgage Options
Now that you have your budget, it's time to consider what type of property you Did you know that a 30-year, fixed rate mortgage isn't the only option for
want to purchase. If you already have your heart set on a single-family home, purchasing a home? If you can afford larger monthly payments, you can get a
then you know you'll be getting a lot more room with more maintenance. On lower interest rate with a 20-year or 15-year fixed loan. Or you may prefer an
the flip side of that, you may want to have less work and more amenities, which adjustable-rate mortgage, which is riskier but guarantees a low interest rate for
would steer you toward a condo or town-home. the first few years of your mortgage.
Get pre-approved Hire the right realtor
Many realtors will not show you homes without a pre-approval letter these Buying a home is stressful enough without having to do your realtor's job. You
days. The pre-approval process shows your realtor how much home you can need to hire someone who you can get along with and who will work for you!
afford. It also proves to the sellers that you're serious about purchasing a home, The right realtor should know exactly what you're looking for, take you to open
which can give you a leg up over the competition if they do not have a pre- houses, and schedule home viewings around your schedule.
approval letter.
Be prepared to compromise
Stay under your pre-approval limit Don't get caught up in the paint color, the blind choices, or the terrible wall paper
Understand that while you can technically buy a home for your pre-approval choice. These things are easily and inexpensively changed after buying a home.
amount, it is the ceiling of your limit. Instead of maxing out that amount, leave Think carefully about what is a need and what is a want when negotiating. You
some room for unexpected expenses. NEED to make sure the seller replaces the broken air conditioner, you WANT
the color in the living room to be almond instead of yellow.
Make a strong offer, but prepared to negotiate
Your realtor should be experienced and will guide you through the negotiation
process. A lot can be up for negotiation in the homebuying process, which Don't forget homeowners and flood insurance
can result in major savings. Are there any major repairs you can get the seller Before you close on your new house, your lender will require you to buy
to cover, either by fully handling them or by giving you a credit adjustment homeowners insurance. Shop around to compare for the best price offering
at closing? Is the seller willing to pay for any of the closing costs? Will it be the most coverage with a deductible that makes sense for you. Keep in mind
mutually beneficial to you and the seller to either close sooner or later than that homeowners insurance is not the same as flood insurance. Even if flood
normal? If you're in a buyers market, you may find the seller will bargain insurance is not required for your property, consider the peace of mind offered
with you to get the house off the market. During negotiations try to keep your for the low annual cost. Note that most flood insurance policies only cover your
emotions in check and not take things personally, keeping in mind that at some main home structure (not detached buildings) and that contents coverage is
time in the future your role may be reversed and as a seller you will want to typically an optional add-on.
maximize the price you can get for your home.
Consider more than the obvious Know what is included on your home inspection
How long will this home and location meet your family's needs? After your offer is accepted, you will need a home inspection. However, not all
Is there any pending new construction or zoning changes that may affect your
property value or view? inspections test for mold, radon, pests, etc. Be sure to know what's included.
If new construction, have you properly budgeted for window treatments, Don't be afraid to ask your inspector to take a look -- or a closer look -- at
furniture needs, fencing, yard care, landscaping, etc.? something and ask questions. In addition to a professional home inspection,
If there is a Home Owner's Association have you considered the cost of dues conduct your own inspection. Is the water pressure adequate? Will you need to
and understand the community rules & restrictions? replace flooring? Are there leaky faucets? Any electrical issues with appliances
If the home is more than 9 years old, are you prepared for potential major running at the same time? Any evidence of termite damage or treatment? Any
maintenance costs (e.g. appliances, AC, pool, roof, etc.)? evidence of water damage to the interior/attic ceilings, walls or floors?
Does Your Monthly Budget Have
Room for a Mortgage?
Use this worksheet to give you an indication of your financial health when including a monthly mortgage payment and
typical homeowner expenses. This worksheet will help you understand your total debt-to-income (DTI) ratio, which
compares your earnings against monthly expense obligations. Mortgage lenders consider DTI ratio when determining the
home loan amount you are eligible for and whether or not you already carry too much debt for a new loan.
? Your total housing expense, including taxes and insurance, should not exceed 31% of your gross income
? Keep your debt at 43% or less of your gross monthly income to show lenders you can control your overall spending
If your monthly budget results in a negative sum, then you should take the time to re-evaluate your spending habits,
debt and home financing budget. NOTE: See other pages for Tips for First Time Homebuyers.
Earner #1 Earner #1
Earner #2 Earner #2
Child Support (you receive) Child Support (you receive)
Other Income Other Income
Total $ 0.00 Total $ 0.00
(use proposed amounts if buying) Phone/Cable/Internet
Mortgage Payment Gas/Electric
Property Taxes Water
Home Owners Insurance Cell Phone
Home Owners Association Dues Groceries
Total $ 0.00 Dining/Take-Out
Percent of Income 0.0%
Gas (Car)
Car Maintenance
Auto Insurance
DEBTS (monthly payments) Health/Medical Insurance
Proposed Housing Expense $ 0.00 Life Insurance
Car Payment/Lease Medical/Dental/Vision*
Child Support (you pay) Clothing
Student Loan(s) Child Care/Tuition
Credit Card (s) Recreation/Vacation
Home Equity Loan/Line of Credit Entertainment (Movies, etc.)
Other Real Estate Owned Personal Expenses (hobbies, etc.)
Other (includ. co-signed loans)
Charitable Donations/Gifts
Total $ 0.00 Total $ 0.00
Debt to Income Ratio 0.0% Total Debt & Expenses $ 0.00
*Not covered by insurance
Get Started: Find a Loan Officer CURRENT BUDGET OUTLOOK
gmfsmortgage.com/apply Total Income $ 0.00
Total Debt Expenses $ 0.00
Difference $ 0.00
GMFS LLC is an Equal Housing Lender. All mortgages are originated by GMFS LLC at 7389 Florida Blvd. Suite 200A Baton Rouge, LA 70806. NMLS #64997
March 2018

Who qualifies as a first time home buyer? In laymans terms, the definition of a first-time buyer is an individual who has never owned a property before. To put it another way someone getting a mortgage who isn’t a homeowner, homemover, buy-to-let investor or just remortgaging is classed as a first-time buyer. However, there are a few nuances which make it a bit more complicated than that.