first time home buyer resized 600It's happening!  The days are getting longer and as I look around my neighbourhood, the homes are popping up For Sale!  This is a sure sign that Spring is approaching!  Buying your first home is a major life decision, and one of the biggest investments you will ever make.

Here are the Top 10 Tips for first time home buyers in Alberta:

1. Don’t skip the home inspection
It is tempting to skip over getting a home inspection performed if you are in a hurry to close the deal.

However, you may pay for your rash decision later, in terms of unforeseen repairs, that can cost you thousands of dollars. A home inspection may cost you money and delay your purchase but will give you peace of mind (and possibly even save you money.)

2. Contact an experienced insurance broker well in advance of purchasing your home

You will need protection for your valuable new asset.  Not all insurance products are created equally and you want a comprehensive policy designed for your individual needs.  By contacting an experienced insurance broker, you can ensure you are adequately protected and educated throughout the home buying process.  Find out more about insurance and buying your first home here.

3.  Your pre-approved mortgage isn't a blank cheque
Getting your mortgage pre-approved is now considered a necessity by most first time home buyers. Get pre-approved before you start seriously looking at properties. There is no cost and no obligation – you have nothing to lose by getting pre-approved, but everything to gain.

It is important to remember, however, that the amount you are approved for is the maximum the bank feels you can afford to pay for your home, based on your income. It should NOT be viewed as the amount you should pay for your home, because it doesn’t include other expenses, like those possible emergency repairs mentioned above!

What if your income suddenly drops? You don’t want to be “maxed out” on your mortgage.

4. Don’t obsess about interest rates

Interest rates are at historic lows. (Remember: back in the 1980s, interest rates in Alberta were in over 15%!)

Don’t put off buying your first home because you are focused on small increases or decreases in interest rates, but don’t rush into buying either, just because rates are low. Make a careful and informed decision, based on more factors than interest rates.

5. Pay off your mortgage faster
There are various ways you can pay off your mortgage faster. For instance, you can increase the number of payments you make each year. Another idea is to pay every two weeks instead of monthly; you probably won’t notice the difference in your everyday cash flow, but over the years this will save thousands of dollars in interest.

6. Don’t forget about closing costs
Don’t use all your savings on the down payment! Budget at least an additional 2.5% of your purchase price to help cover legal fees, taxes, insurance, utilities, moving costs and that all important home inspection.

7. Get your First Time Home Buyer’s Tax Credit (HBTC)
It is easy to find out if you qualify to receive this non-refundable tax credit, and how to apply for it, at the Canada Revenue Agency website.

8. Get it in writing
Hundreds of homes in Alberta have been used as marijuana grow operations or drug labs. An offer to purchase is not complete without a warranty that the house or condominium has never been used for these illegal purposes.

9. Do your homework
The Canadian Mortgage and Housing Corporation offers an excellent guide & information to all the questions you should ask yourself before you buy your first home, plus worksheets to walk you through the process and lots of other essential information about tax credits and other government programs.

10. Work with a great real estate agent
Make sure you work with a reputable, experienced real estate agent, preferably one who knows the neighbourhood you’d like to move into. For first time home buyers, this is particularly important.

 Do your homework and enjoy your home buying experience!