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Last month nearly 21% of the properties sold in Victoria were sold to first time buyers. That is a lot of young people with big dreams taking on a lot of responsibility. We applaud those dreams and remember doing the same thing not that many years ago. It was the right thing to do then. We believe it is the right thing to do now, but whether you are a first timer buyer, or know someone who is, there are a few things to keep in mind when starting out. 1. Consider the cost Consider your budget, of course, but this is also a lifestyle decision. You may be able to afford the mortgage but you’re also going to have to realize that you might be giving up some lifestyle options (trips, dinners out, hanging with friends) because you’re going to be paying a mortgage now. Remember home ownership has its own set of expenses (maintenance, insurance, improvements). Ask yourself: if you lost your job and couldn’t work for three months, would you be able to hang on? Don’t start your new life in your new home as a slave to your mortgage payment. Nice house. No money. (“House poor” – been there.. done that… ain’t no fun…) Consider the cost. Have a budget. Have a plan and stick to it. 2. Get a pre-approved mortgage You don’t want to start house hunting and fall in love with a place you can’t afford. There also may be problems with your credit that you don’t even know about. Know your credit rating and limits before you get started. Your credit is one of three factors that will be considered before you get approved for a mortgage. The other two are income and your down payment. A good mortgage broker can really help in making sure that all the pieces come together. They can also clarify how much you need to have down if you want to avoid paying mortgage default insurance. One way to boost your down payment is to borrow money from your RRSP. First time buyers can use up to $25,000 from their RRSPs tax-free. You need to pay it back of course, but you get 15 years to do it. The bigger your down payment, the smaller your mortgage and overall interest charges you’ll need to pay. 3. Find a great real estate agent Coming from real estate agents this sounds totally self serving, but remember buyers almost never pay any real estate fees. These costs are usually borne completely by the seller. And while having a real estate agent is not necessary when buying a home, it is highly recommended. Having someone who is knowledgeable about the markets and has the direct connections to mortgage brokers, inspectors, insurers, and legal experts can make your purchase virtually trouble free. A great realtor is ‘your’ real estate expert. A great realtor will lead you through the process, and advise along the way, with insight and understanding.