5 Things to Do Before Purchasing Your First Home

Buying your first home is one of the most exciting – and sometimes overwhelming – milestones in life. Whether you’re looking in Windsor-Essex County, Chatham-Kent or the surrounding areas, being financially and mentally prepared before starting your home search will make the process smoother and less stressful.

As trusted real estate advisors at CENTURY 21 Local Home Team Realty, Inc., we work with many first-time homebuyers, and we know the questions and challenges that come up during the journey. Here are five smart steps to take before purchasing your first home:

1. Pay Off Your Car Loan and Other Debts

When you apply for a mortgage, lenders look at your debt-to-income ratio to decide how much you can afford to borrow. A large monthly car loan or credit card balance can reduce your approval amount—or prevent you from qualifying altogether.

By paying off your car loan and lowering other debts, you’ll:

• Improve your chances of mortgage approval
• Qualify for better interest rates
• Free up cash flow for monthly housing expenses like insurance, utilities, and property taxes

Think of it this way: the less debt you carry, the more financial breathing room you’ll have as a new homeowner.

2. Open a First Home Savings Account (FHSA)

In Canada, first-time buyers have access to an incredible savings tool: the First Home Savings Account (FHSA). This account lets you contribute tax-deductible savings (like an RRSP) while allowing you to withdraw them tax-free when it’s time to buy your first home (like a TFSA).

Key benefits of an FHSA:

• Annual contribution room up to $8,000 (lifetime max $40,000)
• Contributions reduce your taxable income
• Tax-free withdrawals for your first home purchase

Opening an FHSA early gives your money time to grow, helping you build a stronger down payment while taking advantage of tax benefits.

3. Build an Emergency Fund

Owning a home is exciting, but it also comes with unexpected expenses. From leaky roofs to furnace repairs, you’ll want to be financially ready for surprises.

Most financial experts recommend saving three to six months of living expenses in an easily accessible emergency fund. Having this cushion in place protects you from relying on credit cards or loans if something unexpected comes up, ensuring you feel secure in your new home.

4. Check & Improve Your Credit Score

Your credit score plays a big role in your mortgage approval and the interest rate you’ll receive. Before applying for a mortgage:

• Request a copy of your credit report from Equifax or TransUnion
• Dispute any errors you find
• Pay bills on time and keep balances low
• Avoid applying for new credit until after you’ve secured your mortgage
• Even a small improvement in your credit score can mean thousands of dollars in savings over the life of your mortgage.

5. Shop for a 30-Year Mortgage

While many buyers focus on finding the perfect home, securing the right mortgage is just as important. For first-time buyers, a 30-year fixed-rate mortgage often provides stability with lower monthly payments compared to shorter-term options.

Be sure to:

• Compare multiple lenders, not just one
• Ask about first-time homebuyer incentives and programs
• Understand the full cost, including interest rates, closing costs, and penalties
• Taking the time to shop around can help you find the best mortgage product for your financial situation.

Final Thoughts: Your Path to Homeownership…

Purchasing your first home is a big step, but with the right preparation, it doesn’t have to be overwhelming. By paying down debt, using smart savings tools like the FHSA, building an emergency fund, improving your credit score, and carefully shopping for a mortgage, you’ll be in a strong position to move forward with confidence.

At Century 21 Local Home Team Realty, Inc., we believe in guiding our clients every step of the way. Whether you’re just starting to think about buying or you’re ready to view homes in Windsor-Essex County, Chatham-Kent or surrounding areas, we’re here to provide expert advice and trusted local market knowledge.

Ready to start your journey to homeownership? Contact us today to learn how we can help you find your first home.