Buying a home is likely the largest purchase you’ll ever make. It can be daunting and stressful; where should I look, how much can you I afford, what is the process, who do I talk with?

To keep things extremely easy, you should simply just talk with me, and I’ll walk you through the process.

But here are some things you can do to make the process more manageable:

1. Get your financial house in order

Understand your annual income, are you on a salary or an hourly rate, or strictly commission? Do you earn bonuses or incentives? How long have you been at your current job or are you self-employed? If self-employed, what is your business structure? Are you a sole proprietor, incorporated, or a partnership, etc? How do you pay yourself? What do you show as income on your taxes?

Understand your budget and your credit. What you owe in debt, both monthly and total, versus how much do you earn? Do you pay your bills on time?

Understand how much money is available for a down payment and where it’s coming from? Is it in your savings, or do you have to cash out investments or RRSP’s? If in an investment or RRSP, what is the process for cashing out the money, and how long will it take? Is it a gift from your parents, or the equity from the sale of your current home? Do you still have to save the down payment, what does that look like?

How much do you think you want to spend, both monthly and/or total purchase price?

Once you have an understanding of the above, start gathering your important documents, for example your previous years’ tax returns, specifically the Notice of Assessments. Also, understand how quickly, and what the process is, for getting a job letter and providing a copy of pay stubs.

2. Talk to ME, a Mortgage Broker

Speaking with a Mortgage Broker will help you make sense of your ‘financial house’, and will help you understand what the home buying process looks likes, and, of course, what the mortgage qualification process looks like. I will help you understand what you qualify for, and what documents are needed in support of the mortgage application. I will also help determine what will be the best mortgage options for you with regards to mortgage features, and lender.

Choosing a mortgage is like going to an ice cream parlour – there are dozens of choices and many different flavours. A Mortgage Broker will look around at all the mortgage options, and find you the ‘best’ deal.

Don’t be afraid to ask questions. The process should be about you, and ensuring that you are comfortable about what is happening and that some of the stress is lessened.

3. Have realistic expectations

Most home buyers start with a wish list that may not be realistic given their resources. Starting big is fine, but you may have to make some trade-offs along the way. Which is more important: location, or size of house and features, do you really need a finished basement, or air conditioning, etc.?

Assess your lifestyle. If you are single, work down town, and enjoy walking to Starbucks for a coffee or walking to a restaurant, and hate cutting grass and shovelling snow, then a detached home in the ‘suburbs’ is not likely for you.

Assess your wants versus your needs. Make a list of the things that you want, and then determine what is a must have need and what you can live without. Do you need a two car garage, a guest bedroom, an in-law suite, a home office? Are you going to have children or do you already have children? Does the location fit your lifestyle (neighbourhood, schools, surrounding amenities and services fits your needs)?

4. Get a Realtor

Once you know how much you can afford, and what you need in a home, it’s time to get a Realtor and start shopping.

When looking for a realtor, don’t be afraid to ask questions; How long have they been in business? What kind of properties they specialize in (important of you are looking at condos, or acreages, or luxury homes for example)? Does their style and expectations match yours?

If you don’t have a Realtor, the best way to get one is word of mouth. Ask me, I work with Realtors every day and can help you distinguish the best from the herd, as well as who will best fit your needs and personality.

5. Stick to your plan

Understand what your spending limit is and don’t go over it. A finished basement might be nice, but if it’s not a must have, and if it takes you out of your budget, keep looking.

Buying a home can be a little about compromise of your needs versus your wants. Try not to get emotional.

6. Get a home inspection

A home inspection will help you understand the state of the property. You wouldn’t buy a used car without checking under the hood, so why buy a house without a home inspection?

A home inspector will check for structural and electrical defects, roofing and foundation problems that could come back to haunt you later. A home inspection isn’t a pass/fail; it will let you know the condition the house is in. Keep in mind it will likely need some repairs, knowing what they could be can help you prepare for them: if you have the willingness, the skills, the budget to deal with them, they may not be a big deal.

A home inspection may also help you negotiate a little off the price, or you may be able to get the seller to address some of the issues prior to possession.

Co-written with Martin Breeze, Mortgage Broker, TMG The Mortgage Group