7 things homeowners wish they’d known before buying their first home

Before anything, you’ll want to get pre-qualified for a mortgage. This crucial first step helps you determine how much you can borrow, so you can focus your search to properties that fall within your budget. Determine how much you can afford and what mortgage options are available to you using a mortgage pre-qualification tool Opens in a new window..

It’s tempting to want to jump right in and start looking at listings, but it’s only window shopping without enough savings in your bank account. The first step in creating a savings plan is to draw up a budget that includes all your income sources and expenses.

You’ll also want to make sure you calculate the down payment and closing costs of purchasing a home, so you know what your savings goal is and can start putting money away each month until you get there. It’s much simpler to stick to a plan and not get lured off-track when you have a clear target in mind.

The future may be uncertain, but opting to insure your mortgage in the event of death or unexpected changes in your health or employment status can help provide you and your loved ones with increased financial security. Creditor insurance can help pay off or reduce your mortgage, or cover your mortgage payments, in the event you become critically ill, disabled or pass away unexpectedly. You can also choose coverage that helps protect you in case you lose your job through no fault of your own — for example, via corporate downsizing.

Learn more about Creditor Insurance for CIBC Mortgages

It can be a shock for first-time home buyers to see the price tag associated with closing costs, which include expenses like legal fees, title insurance, appraisal fees, land transfer taxes, and home insurance. You can expect to pay around 2-5% of the purchase price of the house to cover closing costs, and you’ll want to make sure you account for these costs when calculating how much you can afford.

Don’t miss out on the government’s savings tools for first-time home buyers, or you’ll be leaving money on the table. The First-Time Home Buyers’ Tax Credit helps first-time buyers offset some costs by giving them a federal non-refundable tax credit of up to $1,500.

There’s also the Home Buyers’ Plan, which allows buyers to withdraw up to $60,000 from their RRSPs tax-free to put towards the purchase of a home. This amount must be repaid to the RRSP within a 15-year period.

Once you’ve moved in, you can also take advantage of additional government incentives to make your new home more eco-friendly, which can range anywhere from installing solar panels to something as simple as upgrading to a smart thermostat.

The Canadian government recently introduced the tax-free First Home Savings Account (FHSA). This registered account allows first-time buyers to save up to $40,000 for their first home on a tax-free basis, and you’ll pay no taxes on withdrawals when you use your FSHA towards the purchase of a qualifying home.

It’s easy to be blinded by sparkly light fixtures and a fresh coat of paint, not to mention fancy staging, but cosmetics shouldn’t be your focus when evaluating a potential home. Instead, think about what’s going to matter to you once you move in. Is the structure sound? Do you like the neighbourhood? Consider your non-negotiables and make sure your house checks off those boxes first.

Home buying can be an emotional process and it’s easy to get distracted, so just remember: You can always change a light fixture, but you can’t change your lot size.

Securing a mortgage can be a tricky process to navigate, and having the expert guidance of a trustworthy advisor can alleviate the uncertainty, giving you more confidence in your choices. You want to feel confident about buying a new home, especially when it’s your first one.

Connect with a mortgage advisor who understands exactly what you’re going through, and can help prepare a plan tailored to your unique situation and needs.