First-Time Home Buyer Budgeting: Explained

Navigating the process of buying your first home can be a roller-coaster if you don’t know what it is you’re doing. Luckily for you, I can guide you through what that journey looks like.

As a first-time home buyer, you most likely already know that you’re going to need a large chunk of cash for a down payment – but there are a lot of other costs that can sneak up on you along the way.

Being prepared and saving for those no longer unexpected costs will make this exciting time for you much easier!

Budgeting: Start early and stick with it

Buying a home is one of the biggest purchases you are going to make in your life, but you also have other expenses to consider when planning to save for a down payment you can afford.

You have car payments, home and auto insurance, utilities, groceries – as well as trying to put money away each month to grow your emergency or savings funds. Let’s face it, without a budget in place and the determination to follow it can make this entire process seem impossible.

But it doesn’t have to be.

• Using an online tool like Coldwell Banker Mortgage Payment Calculator can allow you to see what your mortgage expenses will look like.
• Getting pre-approved for a mortgage will save you time and hardship when it comes time to putting in an offer
• Speaking with a financial consultant to help make sense of your money is always a good idea as well.

Your budget will be an important tool in determining what properties you will be able to afford. If the calculator says that you can afford a mortgage of $1,000 per month, you still have to consider the utilities, property taxes, condo fees, your cellphone bill, auto maintenance, and your entertainment subscriptions like Netflix.

Extra Costs: Anticipating unexpected costs associated with buying a home

It isn’t just the deposit that you want to save up for. You’ll also need to put some money away for a home inspection, closing costs, attorney fees, security systems, furniture, appliances, etc…

Home inspections can run between $500 – $1,500 or more, depending on where you live.

Closing costs vary depend on what the final price of the property is, which could be offset by various tax credits (your REALTOR^® can explain what that looks like and if it pertains to you).

And, depending on which province you live in, there may be Land transfer fees you need to be aware of. Land transfer feed can be anywhere from 0.5% – 1.5% of the total cost of your home. Your REALTOR^® can help you get an idea of what some of those costs might be.

You also need to be aware that your notary or attorney’s fees will need to be compensated as well. These costs cover the research and paperwork that goes into the transfer the title of the properties to you.

Working with a REALTOR^®

When you’re a first-time home buyer, you have a lot of questions. The best thing to do is to team up with a REALTOR^® like Tyler Hubbert, who can guide you through this process.

Let’s connect and find out how, together, we can find your new home.

*The content in this article is for informational purposes only.