Getting the keys of your own house can be an exhilarating experience, especially for first time home buyers. However, in their excitement of finally becoming house owners, many individuals end up making mistakes which they regret later on. Buying a home is undoubtedly one of the biggest investments you would make in your life, hence, it is important to make informed decisions.
There are numerous factors that should be considered when buying property, especially in the Canadian real estate market. I have witnessed many excited buyers making decisions based on their emotions which only cost them in the future.
Here is a list of things every potential home buyer must take into consideration before making the final decision:
The financial aspect of buying property is the most important factor you need to figure out. Whether you are buying a condo or a house, you must be on top of your financial situation. Set realistic goals about what you can and can’t afford. Start by examining your bank account, your expenses, your savings, and future plans. Will you be able to afford paying a monthly mortgage? How much can you afford comfortably?
The majority of people buying property in Canada have to opt for mortgages. You must be aware of the current mortgage rates in the market to get a clearer idea of what you will be able to afford. The interest rate in mortgages tends to fluctuate with the real estate market.
Moreover, lenders also consider your ability of paying back the loan. Therefore, before you start looking for a house, you must make sure that your mortgage application will get approved. Have a meeting with your bank or a mortgage broker to assess your situation.
Trends in the Local Market
The local real estate market can also be a major factor that can affect your options and choices of buying a property. Often, there comes a season when buyers are unlikely to find a house in their preferred location or within their price range. If you are not in a hurry, wait for the right time. Talk to a real estate agent to guide you about the latest trends and changes happening in the real estate. The ideal time to start looking for your new home is when real estate prices start dropping.
Saving for Down Payment
Down payment can be a major obstacle for potential buyers. Ideally, you should pay 30% of the overall house price so that the monthly payments are reduced. If you make the down payment lower than 30%, then you will have to purchase additional insurance. This is the insurance which protects the lenders in case you are unable to make the monthly payments. The best way to avoid this is to start saving up for down payment and look for houses once you have a sufficient sum of money saved.
Needs of the Children
Once you have your finances figured out, you can move on to identifying the type of house you want. If you have kids or if you plan to start a family, then considering the needs of the children must be an important factor. For instance, you might want to buy a house which has a good school nearby or you would want to live in a neighbourhood which is children friendly with sufficient parks and facilities for kids.
Ideally, your new house should be close to your work too. This way, you can avoid longer commutes. If you select a place which is two to three hours drive away, then you will barely have time to enjoy your new house with your family. This will also increase your monthly gas expenses which might have an impact on your mortgage payments as well.
Your Own Emotional and Monetary Status
Buying your own house might sound great, but not everyone is prepared for the responsibilities that come with homeownership. You must understand that it is a major commitment and is a decision that shouldn’t be taken lightly. If you have plans to travel the world or are still looking for your dream job, then you might want to wait before things are more settled in your life to buy a home. Keep in mind that you will also have to make time, effort, and money for regular home maintenance.
Additional Costs Associated with Buying Property
Often, people fail to consider the additional costs that come with buying a property. When you buy a home, you will have to pay a land transfer tax. This tax can vary between 0.5% and 2% of the property’s value, depending on the province.
You will also have to pay legal fees. This may reach to about 10% of the overall value of the house as per the property and province. It might also vary if other legal expenses were made by the lawyer on your behalf, for instance cost of registration etc.
Professional home inspection is also needed to make sure the house is in good condition. Therefore, you will have to hire an expert to thoroughly examine the house before you buy it.
Seek Professional Help
Before you make this investment, consider getting professional help so you make an informed decision. Consult a real estate agent, mortgage broker, and a financial advisor to help you understand your options, learn about the real estate market, and to make the entire process easy for you. These experts can guide you towards the right direction and help you avoid any potential mistake that would cost your financially.
If you are a first-time home buyer, don’t forget to get details about the incentives and programs by the Canadian government.
Consider these factors before you invest in a property to ensure that you are making the best possible choices. Buying a house is not as simple as it might seem. You are bound to experience ups and downs, confusions, and concerns. However, if you are fully prepared, the process will go smoothly and you will ultimately purchase a house that you will fully appreciate.
Finding the right house within your budget and in the right location can be difficult. It is easy for anyone to get overwhelmed by all the choices available. With years of experience under my belt, I am equipped to help you in finding and short listing the houses according to your budget and requirement.
Whether you are foreigner looking for a vacation home or a permanent house in Canada, or a local planning to become a house owner, I am here to help. Opt for the wide range of services I offer to make this move easier and smoother for you and your family. My aim is to help you find the best possible solution for you as per your needs. Remember, my business is built on referrals and I am always ready to assist with all real estate queries.