Essential Tips for First-Time Homebuyers

Property Virgins host Sandra Rinomato shares her expertise on the homebuying process.

By FrontDoor.com | Published: 10/20/2009

• It's great to have your financing in place before you look because houses are bought and sold overnight. You could lose your dream property waiting to secure the financing.

• The rule of thumb is that you should be able to afford a mortgage three times your income.

• Lenders subtract any debt payment from your income, so if you have a big debt, you have a lot less income -- and a lot less house.

• Don't forget to set aside money for closing costs when budgeting out what you can afford. It's typically 1-1/2 to 2 percent of the purchase price. That goes toward the land transfer tax and pays a lawyer.

• When you buy new, you have to put down 10 percent within six months or 15 percent within nine months. Also, until the place is registered, you can't get title. Until you get title, you can't place your mortgage, so during that time you're paying what's known as a phantom mortgage or an interim occupancy fee that goes toward nothing -- it's like rent.

• It's better to walk away if you're not comfortable with the situation.

NEXT: Tips for Making an Offer for First-Time Homebuyers >>

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