May 11, 2012

Knowledge Key For First-time Homebuyers

Realizing financial options and how much can be spent is essential for those in the market

Searching for your first home is exciting, but can also be overwhelming, both financially and emotionally. You may have a lot of questions such as: Do I qualify for a mortgage? What’s a pre-approval? And what is amortization and why does it matter? According to recent RBC Royal Bank research, 67 per cent of Canadians between the ages of 18 and 34 are looking to purchase their first home within the next two years.

“You will benefit by doing your research in advance and by setting a budget to help avoid any last-minute surprises,” says Melissa Jarman, director of client strategies for RBC. “Online tools and calculators along with advice from a mortgage adviser can help you prepare for any unforeseen costs and assess which payment options best fit your financial situation.”

Two-thirds of Canadians between the ages of 18 and 34 are pondering buying their first home, RBC says.

Jarman gives us three more tips to get started:

  • Prepare a budget — a budget will help you live within your means and avoid unnecessary debt upon purchasing a home. To help alleviate financial stress, set a maximum budget and financial parameters. Online budgeting tools such as myFinanceTracker (www.rbcroyalbank.com/myfinancetracker) can help track where your money is going.
  • Know your financial options — many first time homebuyers do not know the options available when it comes to financing a home. By speaking with a mortgage specialist, you can explore a variety of financial avenues and set your financial goals.
  • Find an affordable mortgage payment — mortgage payment calculators can help determine how much your monthly payments will be, based on the amount borrowed, interest rates, mortgage term and payment schedule. This link may be helpful: www.rbcroyalbank.com/products/mortgages/mortgage_calculators.html.

Further advice and tips can be found at www.rbcadvicecentre.com, or join the discussion about purchasing your first home at Facebook.com/rbcroyalbank.

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