Strategies for Stress-Free Home Buying

Home buying made easy.

Are you in the market to buy a home, but aren't sure where to start? Planning for this expense can be one of the easiest and most stress-free ways to become a first-time (or second- or even third-time) homebuyer. If you're considering buying a home, here a few suggestions to help you plan properly for your investment.

1. Factor in all costs

Moving into a new home can mean a huge difference in expenses. When weighing your options, it's important to not only look at mortgage costs, but to consider all costs associated with moving and owning a home. Here are some hidden costs to consider when buying a home:

• Appraisal Fees
• Home Inspection Fees
• Land Transfer Tax
• Property Tax
• Legal Fees/Disbursements
• Title Insurance
• Property Survey Costs
• Down Payment
• Adjustments (if needed)
• Moving Expenses (boxes, bubble wrap, tape, moving company, etc.)
• Home Insurance
• Incidentals
• Increases in Utility Bills

These costs often go overlooked in the house buying process, but can certainly impact a monthly budget. If you think about your overall expenses, then you can determine if you are ready to buy a home or not.

2. Consider mortgage affordability

After you calculate your total monthly costs of homeownership for a new home, factor this expense into your current income. If you come out negatively, try seeing if there are expenses you can cut. If you are nervous about your financial security with this new expense, try a test month or two living off this adjusted monthly budget ? You can try putting the difference of your current expenses and your proposed new expenses into a separate account (ex. Proposed Spending ? Current Spending = Money to Savings) to experiment with living on these lesser expenses without going all in.

3. Save up the 20% down payment

If you do not have this minimum down payment required for your home purchase, then it is mandatory to take out mortgage default insurance or CMHC insurance. This insurance is put in place to protect the lender in case the borrower defaults on the mortgage. In other words, you will be spending additional money on top of the interest you are paying for your mortgage. If you are not able to provide a 20% down payment, consider saving and budgeting to help you spend a little less every month so you can save up your 20%. To learn ways to save money on everyday expenses, check out these money saving tips.

4. Watch your credit closely

In the month's leading up to a home purchase, do not take any actions that could negatively impact your credit score. This includes closing old credit accounts, opening new credit accounts, maxing out current credit accounts and making a large purchase like a new car. Moves like this can negatively hit your credit score, meaning your mortgage rate might increase. During your house hunting process, make sure to keep your credit in good standing by continuing to minimize your current debts without acquiring new debts.