Buying Your First Home: 10 Tips for First-Time Home Buyers

As interest rates rise and housing prices seem out of reach, the dream of homeownership for young families feels like it is out of their grasp. 

1. Know what you are looking for

Are you looking for your forever home? Or do you want your first home to help you enter the real estate market, growing your equity to work up to your forever home?

Understand the price ranges of homes in your ideal neighbourhood. You may want to consider several areas, taking into consideration practical things like your commute time, shopping, schools, recreation and other things you value. 

2. Set a budget

Take an honest look at your finances, including your income, expenses, and savings. Determine how much you can comfortably afford for a monthly mortgage payment without stretching your budget too thin. Remember to consider other homeownership expenses, such as property taxes, insurance, and maintenance costs. Having a realistic budget will guide your home search and ensure you focus on properties within your financial means.

3. Start Saving

Now you have an idea of what you need to save for a downpayment, open a savings account to help you reach your goal of owning your own home. Our member service team can help you choose the right savings account for you. Some quick tips to saving start with making simple, but powerful choices on a daily basis. Buying a daily coffee at your favourite coffee shop ranges from $2 - $7. Making your coffee at home comes to about $0.30. By making it at home you save on average between $50 and $200 every month. Start with simple changes to your lifestyle and you’ll be surprised at what you can save. 

4. Make sure your credit score is strong

Your credit score is one of the tools we use to determine the kind of mortgage you qualify for. Before applying for a mortgage, obtain a copy of your credit report and review it for any errors or discrepancies. To strengthen your credit score, pay off outstanding debts, avoid taking on new credit, and make payments on time to improve your credit score. A higher credit score can lead to better mortgage terms and lower interest rates, potentially saving you thousands of dollars over the life of your loan.

5. Save for a Down Payment and Closing Costs

Saving for a down payment is a crucial step in the home-buying process. Traditionally, the downpayment is 20% of the purchase price, although high-ratio mortgages reduce that percentage. Make sure you budget for closing costs, which typically range from 2% to 5% of the home's purchase price.  

6. Determine your down payment

Once you have a budget in place, use the Northern Birch mortgage calculator to determine the downpayment, interest and monthly payments within the price range you have determined.

7. Get Pre-Approved for a Mortgage

Your Northern Birch Mortgage Specialist can help you secure a pre-approved mortgage which can give you a competitive edge as a first-time homebuyer. It shows sellers that you are a serious buyer with financing in place. It also helps you understand how much you can borrow and narrows down your home search to properties within your price range.

As a member of Northern Birch Credit Union, you get the advantage of competitive rates. We turn all our profits into keeping our service fees low and lending rates competitive. 

8. Don’t forget the hidden costs

Remember that closing costs could be up to 5% of the cost of your purchase. There may be additional costs, including title insurance, adjustment costs and legal fees. Your Northern Birch mortgage specialist will help you create a budget that works for you. Northern Birch gives you an added advantage by providing up to $3,000 CASHBACK* and up to $500 for home appraisals. 

9. Understand the different types of mortgages

Choosing the right mortgage is important. With the current trend of rising interest rates, it’s critical that homebuyers understand the differences between fixed and variable rates. Northern Birch offers First-Time Borrowers special rates for both conventional mortgages and high ratio insured mortgages. Make an appointment with a mortgage specialist today to help you understand the options available to you.

10. Get Started

Your Northern Birch Mortgage professionals can help you reach your dream of owning your own home. We’ll be there for you every step of the way, helping you explore the different mortgage options, understand the terms and conditions, and assist with the paperwork and documentation required for the mortgage application.

Discover more about our rates and mortgage options.

* Limited time offer. Some conditions apply.