If you are purchasing a home for the first time, it is only common that there may be some pitfalls along the way. But to prevent these drawbacks from happening, your local Oakville mortgage broker with Loewen Group Mortgages has listed the top first time home buyer pitfalls and how to avoid them.
Pitfall #1: Not Knowing Your Affordability
Many homeowners make the mistake of looking for homes when they do not know their affordability yet. Then they fall in love with a home, only to find out later that the home is outside their budget. So, to avoid this heartbreak from occurring, make sure you get pre-approved by your mortgage broker so you know exactly what price range to shop in.
Pitfall #2: Making Too Little Of A Down Payment
In Canada, if you pay less than 5% on your down payment, you will not be able to qualify for an Oakville mortgage. If you pay less than 20% towards your down payment, you will be required to pay for mortgage default insurance. This is an additional fee that is either owed as a one-time payment or is added to your monthly mortgage payments. This fee is to financially protect the broker in case you were to miss a payment.
Pitfall #3: Not Having Enough Savings
Making the decision to stop renting and become a homeowner is a major financial commitment. This is why it is important to have enough money in your savings before you begin the application process. The more money you have saved the more likely your loan application will be approved because brokers want to know you can afford to make payments on time.
Pitfall #4: Changing Jobs As You Begin Your Application
Oakville mortgage brokers prefer home buyers to have a stable income when they start applying for a home loan. If you have been with your current employer for at least two years then brokers believe you have financial stability. This means that if you are trying to change your job, you should wait to do so until after your loan has been approved for.
For more information on first time home buyer pitfalls and how to avoid them or if you would like to get started on your application for an Oakville mortgage, please contact the Loewen Group Mortgages team at 416-907-3173.