Jeeva Braich

Here are the top 10 steps first-time home buyers should take to prepare for purchasing a home:

1. Review and Enhance Your Credit Score

Obtain a copy of your credit report (Equifax/TransUnion in Canada). 
Eliminate small debts, refrain from opening new credit cards, and maintain low balances.

2. Save for a Down Payment & Closing Expenses

Aim to save at least 5–20% for your down payment. 
Additionally, consider budgeting for closing costs (1.5–4% of the purchase price), home inspections, and moving expenses.

3. Obtain Mortgage Pre-Approval

Consult with a mortgage broker or lender. 
A pre-approval letter demonstrates to sellers that you are serious and informs you of your affordability range.

4. Establish a Realistic Budget

Avoid basing your home search solely on your maximum mortgage approval—consider additional factors such as: 
Property taxes, utilities, maintenance, insurance, and monthly living expenses.

5. Investigate the Market & Neighborhoods

Begin exploring listings early to grasp pricing and market trends. 
Visit neighborhoods at various times throughout the day. 
Think about commute times, schools, crime rates, walkability, etc.

6. Create a Needs vs. Wants List

Determine what is necessary (number of bedrooms, parking, location) versus desirable features (granite countertops, spacious yard).

7. Find a Reliable Real Estate Agent

Just Ask Jeeva!

8. Familiarize Yourself with Government Incentives

Look into programs such as: 
First-Time Home Buyer Incentive (Canada), 
RRSP Home Buyers’ Plan (Canada), 
First Home Savings Account (FHSA), 
and tax credits or rebates.

9. Prepare for the Offer Process

Understand how offers, conditions (financing, inspections), and bidding wars function. 
Ensure you have your deposit funds available (typically 1-5% of the offer price).

10. Plan for Life After Purchase

Budget for: 
Furniture, maintenance and repairs, property taxes, and utility bills. 
Educate yourself about homeowner responsibilities (insurance, utilities, lawn care, etc.).

Here are the top 10 actions first-time home buyers should take to prepare for obtaining a mortgage:

1. Review Your Credit Score

Lenders evaluate your credit score to determine risk.
Aim for a score of 680 or higher to secure better rates.
Correct inaccuracies, settle outstanding debts, and steer clear of late payments.

2. Minimize or Clear Debt

Decrease your debt-to-income ratio (DTI)—a crucial element for mortgage approval.
Pay off your credit cards and loans, and avoid incurring new debts.

3. Set Aside Money for the Down Payment

Usually 5%–20% of the home's cost.
The larger your down payment, the lower your mortgage and possible CMHC insurance fees (in Canada).

4. Compile Proof of Income and Employment

Gather:
Recent pay stubs
T4s or Notices of Assessment from the last two years
Employment letters

If you're self-employed, you'll need at least two years of complete tax returns and financial statements.

5. Know Your Budget

Understand what you can afford comfortably each month (including taxes and insurance).
Utilize mortgage calculators to explore different scenarios.

6. Refrain from Major Purchases or Financial Changes

Avoid buying a car, changing jobs, or applying for new credit before your application.
Unexpected financial changes can negatively impact your chances of approval.

7. Get Pre-Approved Rather than Just Pre-Qualified

A mortgage pre-approval involves a credit inquiry and comprehensive financial assessment.
This locks in a rate for 60 to 120 days and demonstrates to sellers that you're a serious buyer.

8. Familiarize Yourself with Different Types of Mortgages

Gain knowledge about:
Fixed vs. variable interest rates
Term lengths (e.g., 5-year fixed)
Open vs. closed mortgages
Amortization periods (typically 25 to 30 years)

9. Explore Different Lenders or Consult a Mortgage Broker

Compare various banks, credit unions, and brokers to find the most favorable rates and terms.
Brokers can connect you with multiple lenders and frequently negotiate better offers.

10. Prepare Your Documentation

Ensure you have the following ready:

Identification (driver’s license or passport)
Income evidence (pay stubs, NOAs)
Bank statements (from the last 3 to 6 months)
Proof of the source of your down payment (savings, RRSP, gift letter if applicable)