Are you thinking of buying a house sometime soon? Great! Now’s a perfect time to start looking, as the spring market tends to be a bustling one. But before you look for a new house, there are a few questions you need to ask yourself first. Having the answers to these questions will help you be better informed when getting into the market in Toronto.
1. What’s Your Budget?
Before you start pounding the pavement in search of a new home, you’ll want to know exactly how much you can comfortably afford. There’s no sense in looking at homes in the $900,000 range, for instance, if you can only realistically afford a home that’s no more than $700,000.
Even if you think you know what price point you should be looking at that matches your income and assets, there are other costs associated with buying a home that you might not have considered. You may think you know the right price range to match your income and assets, but there may be other costs you hadn’t considered. It’s important to think about other payments that could be added to the initial purchase price of the home.
For example, there might be some repairs, improvements, or updates that need to be made, which should all be accounted for in the overall cost. There are also closing costs to factor into the overall equation. Not only do you have to come up with a down payment, there are also other costs associated with closing on a real estate deal. These can include lawyer fees, home inspection fees, and title insurance, among others.
Make sure you get an accurate estimate of how much your monthly mortgage payments will be and see how other expenses will add to your budget.
2. What Type of Mortgage Should You Get?
There are plenty of options out there when it comes to mortgages, but the one you choose should suit your finances. Should you get a 15- or 30-year mortgage? Fixed-rate or variable-rate? Every homebuyer has different needs. What might work for one buyer might not be suitable for another.
Working with an experienced and knowledgeable mortgage specialist is important when it comes to helping you get the best mortgage for your requirements. A broker who understands all the loan products out there is critical in showing you what’s available and helping you meet your needs. We work with some amazing brokers if you need a referral!
3. Is the Location Right For You?
While the home itself is obviously an important feature to consider, the location is even more important. You can always make changes to a home, but you can’t change its location. That’s why it’s so important that you fully scope out the neighbourhoods you’re interested in to see if they fit the bill.
For starters, is the location convenient for you when it comes to commuting to and from work? Have you considered how long it will take you to get to work every day based on the location of the subject property? What’s the access like to major roadways and highways? Is there easy access to public transit? These are obviously major considerations to make.
But in addition to your morning and evening commute, it’s also critical to consider the makeup of the neighbourhood itself. Is it in a good school district? What’s the crime rate like in the area? Are there any plans for future development? What are the neighbours like? What about noise pollution from overhead airplanes or nearby trains? What types of amenities are offered in the community? These are all questions you need to ask before you decide to put an offer on a home.
4. What’s the Condition of the Home?
Before you pay big bucks for a new home, you’ll want to know the exact state of condition it’s in. That’s where a good home inspector comes into the picture. Ideally, you should include a condition on your offer that allows you the chance to have a professional home inspector inspect the property in its entirety to see if there are any issues with it that could influence your offer price, or even your desire to buy it at all.
5. How Much Should You Offer?
Toronto’s housing market is pretty competitive these days, and if you’re bidding on a great home in a desirable location, you’ll want to make sure that your offer price is solid. Offering too low could potentially kick you out of the game.
That’s why a Comparative Market Analysis (CMA) is so important. Your agent will pull a report of similar homes in the area that have recently sold. The prices that they sold at will give you a good idea of how much you should offer. A competitive offer will go a long way in helping you realize a successful deal and get you the home you want at a price that accurately reflects the current market.
Final Thoughts
Making a home purchase is a big deal. It’s likely the biggest investment you’ll ever make, so it’s critical that the decision you make is a sound one. The best way to get into the market is to go in armed with information. Be sure to ask yourself the above questions first before buying a house.