Buying a home for the first time can be a total rollercoaster. They really don’t teach you everything in school. The excitement (goodbye rent cheques!) and fear (hello, responsibility) that comes with buying a home can be overwhelming, but the key is being prepared. 

Before diving into the sea of listings, here are five lessons first time home buyers wish they knew before finding home-sweet-home. 

1. Be flexible about your first home requirements

Your first home likely won’t be your “dream home”. Flexibility and compromise is key when it comes to looking for that first property, if you’re focused on a specific location, like the trendy King West neighbourhood in downtown Toronto, you may need to give up certain aesthetic features or look a little outside of your desired neighbourhood to stay within your budget. 

2. Know how credit really works 

Credit isn’t just about paying your bills on time. Make sure you don’t just know your credit score, understand how it works, too. Along with paying bills on time, the amount of credit you can access also comes into play. There are many factors when it comes to building your credit score–such as trying to use less than 35% of your available credit. 

3. Understand that mortgage pre-approval doesn’t mean a guarantee 

It’s important to get a mortgage pre-approval because it helps you know how much you may be able to afford. But, it’s not the same as actual approval for financing. The lender will still need to underwrite the loan and the property needs to meet the requirements. So pre-approval does not equal approval. 

4. Know your closing costs

Just when you thought it couldn’t possibly get more expensive to buy a home, it does. Enter closing fees. Lawyers, land transfer taxes, home inspections and more. These closing costs can add up to 5% of your new home’s value, so make sure you’re setting aside some extra cash so you’re not caught off guard. 

5. Find the right realtor 

Clearly buying a home is complicated! That’s why at Key we’re big fans of realtors. Having experts on your side to help navigate the stress and the 42-step buying process we have here in Ontario will make your life so much easier.

And if you’re asking yourself, ‘should I be owning or renting right now?’, we’re creating a third option that allows you to build home equity without needing to qualify for a mortgage or save for a massive down payment. It’s called Key (hi!) and you can learn about how our model works here.