Thinking About Buying This Fall? What to Do Before You Start House Hunting
If buying a home is on your radar this fall, August is a great time to start getting prepared. You don’t need to be ready to make an offer tomorrow, but doing some groundwork now can make the process much smoother when the right property comes along.
Start With a Pre-Approval
Before you start seriously house hunting, it’s important to understand what you can comfortably afford. A mortgage pre-approval looks at your income, debts, down payment and credit to help establish a realistic purchase price.
It’s also worth remembering that the maximum you qualify for and the amount you’re comfortable spending each month aren't necessarily the same thing. Knowing both numbers before you shop can help keep your search focused.
Get Your Documents Organized
Mortgage lenders require documentation to verify your application, and getting everything together early can save valuable time once you have an accepted offer.
Depending on your situation, this may include recent pay stubs, employment letters, T4s, Notices of Assessment, bank statements and documents confirming your down payment. Self-employed buyers may need additional income documentation.
Know Where Your Down Payment Is Coming From
Whether your down payment is coming from savings, investments, an FHSA, RRSPs through the Home Buyers' Plan, proceeds from another property or a gift from family, it's important to understand the rules around those funds.
Lenders will typically need to verify the source and history of your down payment, so moving money between accounts right before making an offer can sometimes create unnecessary paperwork.
Don't Forget About Closing Costs
Your down payment isn't the only cash you'll need. Depending on where you're buying, closing costs can include legal fees, property transfer or land transfer taxes, adjustments for property taxes, inspections and other expenses.
Planning for these costs ahead of time helps avoid surprises as you get closer to possession.
Be Careful With New Debt
If you're planning to buy soon, this may not be the best time to finance a new vehicle, increase credit card balances or take on a new loan. Even a seemingly manageable monthly payment can affect how much mortgage you qualify for.
Your financial picture also needs to remain relatively consistent between your pre-approval and closing, so it's a good idea to check before making any significant financial changes.
Know Your Numbers Before You Fall in Love With a Home
It’s easy to start browsing listings first, but having your financing organized beforehand puts you in a much better position when the right home comes along.
A little preparation now can mean fewer surprises, a clearer budget and more confidence when you're ready to make an offer this fall.
If you're thinking about buying in the coming months, getting your mortgage strategy in place early can help you understand your options and what makes sense for your situation.
