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

Purchasing your first home can be exciting, but it can also be daunting––particularly in today’s unpredictable housing market, with its rollercoaster ups-and-downs. The good news is that you’re not in this alone: Numerous homeowners who came before you have been in the same position, and there’s plenty you can learn from their past experiences (and mistakes).

We’ve partnered with CIBC to share some helpful tips and advice from homeowners about what they wish they’d known before buying their first home.

1. Get pre-qualified for a mortgage

Before you start house hunting, 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. Using the CIBC mortgage pre-qualification tool can help you quickly and easily determine how much you can afford and what mortgage options are available to you. The tool will also connect you with a mortgage advisor who can answer any questions you may have and talk you through next steps, so you can house hunt with confidence.

2. Create a realistic savings plan

It’s tempting to want to jump right into the fun part of the house hunting journey, i.e. 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. Look for easy ways you can reduce your spending, like bringing a homemade lunch to work instead of dining out, paring down your streaming services by cancelling ones you use less frequently, or cutting back on non-essential purchases.

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.

3. Consider creditor insurance for your mortgage

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).

So don’t let future uncertainty stress you out. You can choose the coverages that meet your specific needs and budget, and can receive on-the-spot approval provided you can answer “No” to the health questions on the application. It’s also super-simple to add this optional coverage to your new mortgage: the insurance premiums are typically added directly to your mortgage payments for maximum convenience and minimal hassle.

4. Be aware of closing costs

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.

5. Take advantage of government saving tools

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 $35,000 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 local and federal 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.

One more savings newbie buyers should be aware of? The Canadian government recently introduced the Tax-Free First Home Savings Account (FHSA), which came into effect April 1, 2023 and will be available to eligible CIBC customers later this year. This exciting new 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.

6. Don’t get distracted by cosmetics

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? Is it close to public transit? If you drive, is there a driveway or garage? Consider your non-negotiables and make sure your house checks off those boxes first. Home buying can be a highly 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.

7. Choose a mortgage lender with a strong reputation

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. CIBC’s long-standing reputation and mortgage expertise make them a great choice for first-time home buyers who need help understanding their financial situation and making sense of the various mortgage options available to them. You want to feel confident about buying a new home — especially when it’s your first one — and CIBC makes it easy for first-time buyers to 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.

Having a mortgage lender you trust matters every bit as much as your mortgage rate, especially in an uncertain housing market. Whether you’re looking for your first home or your next one, to renew your mortgage or switch providers, visit CIBC to learn more about how their mortgage specialists can help. Find a mortgage advisor near you or request a call today.