- Not really being pre approved. Many first time home buyers first stop is at their local bank branch where they deal or where their family has dealt for years. After a quick 10 minute conversation, the first time home buyers are told how much they qualify for. Now here is the kicker that many learn the hard way, they are not really pre approved because the bank didn’t very anything (income, credit history or down payment). Some make an offer on a home and are not able to get approved because they didn’t get the proper guidance and education on the process up front.
- Not qualifying for the amount of mortgage you want to get the home you love. Many first time home buyers have student debt, vehicle loans, or other types of credit which have an impact on how much they qualify for especially under the Stress Test rules implemented in Canada in late 2016. A good rule of thumb is that for every $470 in loan payment reduces your purchasing power on a home by $100,000. Get advice up front because there may be ways you can restructure debt to get the home you want.
- Closing costs. The closing costs in Manitoba are close to 2% of the purchase price for first time home buyers. Land transfer tax, PST on mortgage default insurance and property tax adjustments are a few of the biggest costs associated with the purchase of a new home. Did you know that property tax adjustments can be avoided?
- Updates required in homes. First time home buyers can get discouraged by the quality of homes in Winnipeg and a lot this can be due to the age of the housing stock in Winnipeg. The Purchase with Improvements program helps buyers to make renovations to make their home perfect, it works great and many I have worked with have used this program. Without this knowledge buyers may take a long time to find the perfect home at the right price.
- Down payment required. First time home buyers do everything they can to get the minimum down payment required. The most common sources are their savings, RRSP’s and a gift from a family member. There are some lenders which allow your down payment to be borrowed but this is not easy to be approved for.
The top surprise for First Time Home buyers after they buy…mortgage penalties, especially those penalties on 4 and 5 year terms with the Big Banks. More on that in another blog
Don’t let these surprises happen to you, CALL NOW (204-292-4817) to get the advice and education you need before you buy.