Are you planning to buy your first home? It is an exciting and nerve-wracking experience. You can’t wait to accomplish your life-long dream; however, there are many things to consider, from the finances to the neighborhood.
As a first-time homebuyer, you might have so many doubts and queries. You are new to the real estate world and may not know how to navigate it. Don’t worry! We have put up a guide to help you buy your first house in Victoria, BC.
How Well is Your Financial Condition?
Before exploring townhouses for sale in Victoria, BC, you must assess your financial condition. It will help you decide whether you are ready to be a homeowner or need to prepare more for the same. You need to consider both purchase and ongoing home expenses. The main cost that you need to consider are:
- Down Payment: Yes, you can finance your home. However, you also need to pay the down payment. The down payment you must pay will depend on your mortgage option and lender. It may vary from 3% to 20% of the home price.
- Closing Cost: It is the expense and fees you must pay to finalize the mortgage. It might vary from 2% to 5% of the loan amount. You can also ask the home seller to pay part of your closing cost.
- The Moving-In Expense: Above is just the upfront cost that you must pay while home shopping. However, they are so many other expenses you need to make after closing the deal. This expenditure may include home renovation, repair, furnishing, and upgrades, to name a few.
Now that you have an idea about the home buying expenses, it will become easier to assess your financial condition. Experts recommend buying apartments for sale in Victoria, BC, after saving at least six months of living expenses. House buying expenses include closing costs, down payment, and other emergency expenditures; you must be ready for it.
How Much Expensive Home Can You Afford?
Now that you have assessed your financial health and decided that you are ready to be a homeowner, you need to determine how much you can afford. It will help you to set a budget.
Deciding on a budget and sticking to it is essential, while shopping for houses in Victoria, BC. It will prevent you from falling in love with property out of your budget and experiencing disappointment.
The factors that can affect how much expensive a home you can afford and the type of mortgage you qualify for are:
- Debt-To-Income (DTI) Ratio
The debt relative to your income is known as the debt-to-income (DTI) ratio. The mortgage lender will consider this information, while deciding on the financing options you qualify for. Many lenders don’t accept a DTI ratio higher than 43%.
- Credit Score
Another important detail that the mortgage lender consider is your credit score. The higher your credit score, the better your interest rate and financing options are. Generally, a credit score of 760 and higher is considered ideal for the lowest interest rate and more favorable terms.
Experts recommend getting pre-qualified and pre-approved before beginning your search for a new abode. It will help you determine how much you can afford. Moreover, it will also make the seller believe you are serious about the offer. Finally, when you close the deal, it will become easier to wrap up the processing and paperwork.
Side Note: Don’t forget to check out the first-time home buyer assistance program. This program helps you avail of low-interest rate mortgages and down payment and closing cost assistance.
What Kind of Home are You Looking For?
While shopping for your new abode, you will encounter a wide range of housing options, including:
- Traditional Single-Family House
Each kind of residence option has its own benefits and challenges. Thus, it would be best to find a home that will meet all your requirements.
Before exploring townhouses for sale in Victoria, BC, list the features you want in your new home. Prioritize the attributes that are non-negotiable for you. Remember, you might not find a house that ticks all the boxes on your checklist. Thus, it is crucial to determine what elements are negotiable and what are not.
The Bottom Line
Above are some aspects that you must consider, while shopping for your first house. Hire a real estate agent to make the home buying experience smooth and hassle-free. Their expertise and knowledge will help you to the best deal.