6 steps to buying your first home

1. Save for your down payment

Aim to save at least 20% of the purchase price, and borrow the rest from the bank. This type of loan is called a mortgage.

2. Make sure your credit report is in good shape

To qualify for a mortgage, you will have to pass a credit check. Order a copy of your credit report and check it for errors.

3. Get pre-approval for a mortgage

Get pre-approval in writing. You will know how much you can afford for a house. And it will give the seller more confidence in your offer because you have financing arranged.

4. Shop around

Go to open houses. View a variety of properties. Explore different neighbourhoods and rank them based on your priorities.

5. Get financing arrangements in writing

Understand how your mortgage works – fixed or variable rate, payment schedule, fees and any special conditions.

6. Check the documents carefully

When you’re ready to buy, review all documents related to the purchase with a real estateEstate The total sum of money and property you leave behind when you die.+ read full definition lawyer. You’re signing a binding legal contract.

If you’re renting now, check when your lease will expire. You could pay penalties if you try to exit your lease early.

Warning

You may incur a penalty when exiting a mortgageMortgage A loan that you get to pay for a home or other property. Often the loan is for 20 years or more. You make a set number of payments for a set amount each year.+ read full definition before the end of the termTerm The period of time that a contract covers. Also, the period of time that an investment pays a set rate of interest.+ read full definition. Learn how this penalty is calculated.

Caution

When you buy a home, you sign a binding legal contractContract A binding written or verbal agreement that can be enforced by law.+ read full definition. Make sure a real estate lawyer reviews all documents related to the purchase.

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