5 ways to become a first-time buyer faster

5 ways to become a first-time buyer faster

Buying your first home is a big deal, both financially and personally. Doing some research, talking to the right people and having all your ducks in a row before you start can help you a lot. Here are five things you should keep in mind to help you get into your first home sooner rather than later.

1. Think of your first purchase as a stepping stone, not a forever home.

For many people, a detached house in the city is the Holy Grail of home ownership. And that’s no surprise: not sharing walls with your neighbours and having a backyard and a driveway are all very appealing features. But as most first-time buyers know, having a house as your first home isn’t attainable for everyone. So it’s important to be realistic.

Rather than looking for the perfect “I want to live here til I die” unicorn right out of the gate, find something that’s “okay for now,” and use it to build the equity you need to get into that dream property. The sooner you buy that stepping stone, the faster you’ll build that equity – and the faster you’ll get into the forever home you’ve been dreaming about.

Related info: Your definitive guide to today’s Toronto housing market

2. Get pre-approved, stat.

If you don’t know how much the bank will lend you, you don’t know what you can buy. And while using mortgage calculators is all well and good, they are only meant to give you an idea of what you can afford. How much a lender is actually willing to hand over is a little different. When they do a pre-approval, they don’t just factor in the price and your income, they look at lot more stuff: things like property taxes, maintenance fees, closing costs and other expenses – which can all add up fast – while taking a close look at any other debt (credit cards, car loans, student loans, etc.) you might have.

Getting pre-approved also gives you an important bargaining chip: it allows you to make a firm offer that isn’t conditional on financing. Despite a slower condo sales market, bidding wars can still happen, and the highest firm offer usually wins. It really doesn’t make sense to start seriously looking for a place before a lender gives you the number you’ll be working with.

Related info: Should I get pre-approved for my mortgage?

Mortgage Broker on Video chat

3. Use a mortgage broker.

You might have a great relationship with your bank, but remember that no matter how great they are, they only have access to their own products and rates. A broker, on the other hand, has access to products and rates from dozens of lenders, so the chances of finding a mortgage that fits your specific needs are a lot higher. And more choice equals better options and greater savings.

When you’re looking for a mortgage broker, make sure he or she is experienced and has a solid reputation; it’s a good idea to ask around for recommendations. While it’s very nice that your cousin/brother-in-law/best friend’s nephew just became a broker, and you want to throw some business their way, think twice. The Toronto market is fast and can get pretty frenzied: you need a full-time pro who’s been in the biz for a while and really understands the lending process, complicated government regulations, the specifics of buying a condo, and knows to ask the right questions, when to get clarification, and what credit info needs to be covered.

Read more: Should I work with a mortgage broker?

4. Have your deposit ready to go.

Once you start looking, you never know when you’ll land on “the one.” If you find yourself ready to make an offer, make sure you can access the cash you need for a deposit. You’ll need to hand over 5% of the purchase price 24 hours after your offer has been accepted. (That’s not enough time to cash out an investment, for example.) Have it liquid and available to use. If you don’t, you might lose out to another buyer who has the cash on hand.

5. Need a little extra buying power? Think about using a co-signer.

With affordability plummeting across Canadian markets, it can be hard for a first-time buyer on a limited budget to get a mortgage that covers a property, especially in the 416. If you’re a single buyer with a single income to draw from? It’s just that much tougher. These days, a lot of first-timers are opting to use a co-signer to qualify for a mortgage. If you’ve got parents or other family members who are willing to help you out, it’s a good option.

Related info: 5 things to consider before you buy

Are you a first-timer thinking about buying a condo in Toronto? Our First-Time Buyers Hub has a ton of great info to get you up to speed with everything from mortgages, closing costs, choosing an agent and more. Check it out to learn the basics, or contact a property.ca agent to answer your questions about buying your first home.

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