Get Help Buying Your First Home

The problem most renters face isn’t the ability to meet monthly mortgage payments. Goodness knows that you must meet this monthly obligation every 30 days already. The problem is accumulating enough capital to make a down payment on something more permanent. But saving for this lump sum doesn’t have to be as difficult as you might think.

Talk to a mortgage broker or a Realtor about the different possibilities that could transition you from renting to owning. These conversations don’t cost you anything, and come with no obligation to actually buy. Take the time to do the research: you might be surprised how affordable home ownership actually is!

You can buy a home with much less down than you think.

There are some local or federal government programs (such as 1st time buyer programs) to help people get into the housing market. You can qualify as a first time buyer even if your spouse has owned a home before as long as your name was not registered. Ensure your real estate agent is informed and knowledgeable in this important area and can offer programs to help you with your options.

You may be able to get your lender to help you with your down payment and closing costs.

Even if you do not have enough cash for a down payment, if you are debt-free and own an asset free and clear (such as a car), your lending institution may be able to lend you the down payment for your home by securing it against this asset.

Create a cash down payment without going into debt.

By borrowing money for certain investments to a specified level, you may be able to generate a significant tax refund for yourself that you can use as a down payment. While the money borrowed for these investments is technically a loan, the monthly amount paid can be small, and the money invested in both home and investment will be yours in the end.

You can buy a home even if you have problems with your credit rating.

If you can come up with more than the minimum down payment, or can secure the loan with other equity, many lending institutions will consider you for a mortgage. Alternatively, a seller take-back mortgage could also help you in this situation.

Talk to an Edmonton Realtor about the possibilities of buying real estate in Edmonton.

Wants Versus Needs When Buying a Home

If you’re like most home buyers, you have two primary considerations in mind when you start looking for a home. First, you want to find a home that perfectly meets your needs and desires; second, you want to purchase a home for the lowest possible price.

When you analyze those successful homebuyers who have been able to purchase the home they want for thousands of dollars below a seller’s asking price, some common denominators emerge. Negotiating skills are important, but there are three additional key factors that must come into play long before you ever submit an offer.

Make sure you know what you want.

As simple as this sounds, many homebuyers don’t have a firm idea in their heads before they go out searching for a home. In fact, when you go shopping for a place to live, there are actually two homes competing for your attention: the one that meets your needs, and the one that fulfills your desires. Obviously, your goal is to find one home that does both, but in the real world this situation doesn’t always occur.

When you’re looking at homes, you’ll find that you fall in love with one or another home for entirely different reasons. Is it better to buy the four bedroom home with room for your family to grow, or the one with the big eat-in kitchen that romances you with thoughts of big weekend family brunches? What’s more important: a big backyard, or proximity to your child’s school? Far too often people buy a home for the wrong reasons, and then regret their decision when the home doesn’t mean their needs.

Make sure you don’t shop with stars in your eyes: satisfy your needs first. If you’re lucky, you’ll find a home that does this and also fulfills your desires. The important thing is to understand the difference before you get caught up in the excitement of looking.

Searching for the right Edmonton Luxury Home that will fulfill your dreams? Start searching Edmonton Luxury Properties to see what’s available.

Before Getting a Mortgage: 6 Tips

Whether you are about to buy your first home, or are planning to make a move to your next home, it is critical that you inform yourself about the factors involved. Industry research has revealed that there are six common mistakes that most homebuyers make in mortgage shopping that can have a significant impact on the outcome of this critical negotiation. If handled correctly, these issues could result in a mortgage that will cost you less over a shorter period of time.

Before you commit your hard earned dollars to monthly mortgage payments, consider these six issues. Effective considerations of these important areas can make your payments work much harder for you.

1. You can – and should – get preapproved for a mortgage before you go looking for a home.

Mortgage preapproval is easy, and can give you complete peace of mind when shopping for your home. Your local lending institution can provide you with written preapproval for you at no cost and no obligation. More than just a verbal approval from your lending institution, a written preapproval is as good as money in the bank. It entails a completed credit application, and a certificate which guarantees you a mortgage to the specified level when you find the home you’re looking for.

2. Know what monthly dollar amount you feel comfortable committing to.

When you discuss mortgage preapproval with your lending institution, find out what level you qualify for, but also pre-assess for yourself what monthly dollar amount you feel comfortable committing to. Your situation may give you a preapproval amount that is higher (or lower) than the amount of money you would want to pay out each month. By working back and forth with your lending institution to determine what this monthly amount is, and what value of home this translates into at today’s rates, you won’t wate time looking at homes that are not in your price range.

3. You should be thinking about your long term goals, and expected situation, to determine the type of mortgage that will best suit your needs.

There are a number of questions you should be asking yourself before you commit to a certain type of mortgage. How long do you think you will own this home? What direction are interest rates going in, and how quickly? Is your income expected to change (up or down) in the near term, impacting how much money you can afford to pay to your mortgage? The answers to these and other questions will help you determine the most appropriate mortgage you should be seeking.

4. Make sure you understand what prepayment privileges and payment frequency options are available to you.

More frequent payments (for example weekly or biweekly) can literally shave years off your mortgage. Simply by structuring your payments so they come out more frequently, will significantly lessen the amount of interest that you will be charged over the term. For the same reason, authorized prepayment of a certain percentage of your mortgage, or an increase in the amount you pay monthly, will have a major impact on the number of years you will have to pay and could shorten your payment term considerably. These two payment options can cut years off your mortgage, and save you thousands of dollars in interest. However, not every mortgage has these prepayment privileges buil in, so make sure you ask the proper questions.

5. Ask if your mortgage is both portable and/or assumable.

A portable mortgage, where available, is one that you can carry with you when you buy your next home and avoid paying any discharge penalties. This means that you will not have to go through the entire mortgage process again unless you are making a morve up to a much more expensive home. An assumable mortgage is one that the buyer for your home can take over when you move to your next home. This can be a very powerful tool at the negotiating table making it much easier and more desirable for a buyer to buy your home, and again saves you any discharge penalties.

6. You should seriously consider dealing with a Mortgage Broker

Consider dealing only with a professional who specializes in mortgages. Enlisting their services can make a significant difference in the cost and effectiveness of the mortgage you obtain. For example, they can make the process faster thereby avoiding costly delays. Typically there is no cost or obligation to enquire.

If you need a recommendation for a mortgage broker in Fort McMurray, try consulting a Fort McMurray Realtor: they have worked with many brokers and will be able to suggest a good one to you.

Buying a Condominium

When considering the purchase of a condominium you need to know how the complex is run and financed in order to make an informed decision. Understand what you will own before you make an offer to purchase a specific unit and what is considered to be common property that you will own jointly with other unit owners.

A condominium unit is financed the same way you would finance any other property purchase. You will probably get a mortgage through a financial institution and make a monthly payment of principal and interest.

If you are buying a new condominium from a developer, you need to find out if there is a “blanket mortgage” on the development. Seek legal advice for a complete explanation of a blanket mortgage and how it might affect you as an owner.

Whether you plan to purchase a condominium from a developer or a previously owned unit, talk to people who own condominium units in the same complex, speak to the manager or a member of the Board of Directors. All these individuals can give you good information about owning a unit in the complex and about the governance of the condominium corporation.

Questions to Ask Before Buying a Condo

• What is the development’s history? (e.g. Are there any persistent problems with the plumbing or other utilities?)
• Does the common property appear to be well maintained and managed?
• Have any transactions taken place affecting the common property such as transfers, leases or re- division of the units?
• Do the unit owners own the recreational facilities as part of the common property, or does the condominium corporation lease them? If they are owned, are they used by anyone besides the unit owners? If they are leased, what are the terms?
• What is the current financial status of the corporation? Is the corporation operating with a surplus or deficit?
• How many of the units are unoccupied?
• How many are rented?
• Are you personally responsible for any maintenance duties?
• Are there extra parking stalls for owners? Is there enough visitor parking? Are there restrictions on visitor or owner parking?
• Is there a place to park a recreational vehicle?
• Are there any bylaw restrictions governing your use of your unit? (e.g. Can you have pets? Is there an age restriction on occupants in the complex? Can you operate your home-based business from your unit? Can you put up your satellite dish? Can you put in a hot tub?)
• How much money is in the reserve fund?
• How do the owners and board get along? Is this the kind of community you want to live in?

In addition to asking how much money is in the reserve fund you should know:

• How much of your condominium contribution (fees) goes to the reserve fund?
• When the last reserve fund study, report, and plan was completed?
• What major expenses, if any, are being considered in the reserve fund plan?
• How much money will be needed to establish and or maintain the fund to offset future replacement costs?
• How does the board plan to raise those funds (increased condominium contributions, special assessments)?

Ask for a copy of the reserve fund plan and the annual report. If you wish, you can also ask for a copy of the reserve fund study report (you may have to pay a fee to obtain these documents).

There are lots of additional things involved in purchasing condominiums that aren’t required when you purchase a single family home. Make sure you have a Calgary Condos specialist by your side when shopping the condo market.

Five Great Things About Home Ownership

If you’ve been on the fence about homeownership, now is the time to take a leap! Don’t let the negative press deter you from one of life’s greatest joys.

Take a look at five short and sweet reasons that homeownership is great!

1. Equity. When you pay rent, you never see that money again. It is lining the landlord’s pocket. Yes, buying a home may come with some hefty initial costs (downpayment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Homeownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today’s market.

2. Relationships. Renters tend to see their neighbours come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbours stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.

3. Predictability. Well, as long as you have a fixed-rate term on your mortgage it’s predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years (or so). You know that each year you’ll need to pay for the gutters to be cleaned, and so on.

4. Ownership. Okay, this is a given. Homeownership means you “own” your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart’s desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!

5. Great Deals. It’s a great time to buy. Interest rates are at historic lows. We’re talking 4.0 percent instead of 6.0 or higher. This means big savings for today’s buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a downpayment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.

There are lots of great expanding communities and new developments cropping up in the Fort McMurray real estate market. Learn more about living in Fort McMurray communities before you start your house hunt, and you’ll be ahead of the game when buying Fort McMurray homes.

Consider Your Lifestyle, Present and Future

Before you begin shopping for your home, reviewing your lifestyle, both now and in the future will make a big difference in the type of home you may need. You will save time by defining your goals before you start house hunting. You are likely to find the home you want much quicker because you won’t waste your efforts viewing homes that don’t meet your criteria.

Look at your lifestyle right now. Are there some areas you would like to change? Consider your lifestyle a few years from now: will it remain the same? Will your needs increase or decrease? Will you need a small or large home to meet your changing lifestyle needs? Perhaps the attic or basement can be converted into additional living space.

Do you have preschoolers? In a few years they will be teenagers, perhaps looking to move out and establish their own home. Perhaps your children have already left and you don’t need a large home. Do you know how long you’re planning to stay in your home? Two years? Five years? Twenty years?

Where do you spend the most time? The kitchen? Basement? Kitchens and family rooms are often gathering places. Be sure these areas are large enough for your family and your use levels.

What about entertaining? Do you need extra space to accommodate large or frequent family functions? Could you convert the basement into a family area? Do small children need a play area, or do teenagers need a recreation area?

How many bedrooms do you require? Some people like smaller spaces for children, a home office, or frequent guests.

Bathrooms are among the busiest place in the home. Can the bathroom handle the traffic of your family?

Think about your employment situation. Will you be changing jobs, or accepting a promotion with another company in another location? If transferred, could you sell your home quickly? How much time do you want to spend driving to and from work each day? Do you rely on public transportation?

Look at your lifestyle compared to home ownership. How much time do you have to spend on maintenance? Are you a gardener? Do you enjoy puttering in the garden, mowing laws, and maintaining flower beds? Are you a person who enjoys fixing things around the house? While owning your own home is a wise investment decision, it does come with responsibilities. To maintain the value of your home and protect your investment you want to ensure your home is in good condition and repair. This means careful attention to items that need to be fixed. Often, fixing them right away is easier than waiting for things to accumulate. If you’re not keenon lots of maintenance, a newer home or perhaps a condominium may be a better option for you.

On the other hand, perhaps you enjoy painting, fixing, decorating and all the assortment of items needed to maintain a home. You might find an older home in a great neighbourhood that’s well below market value because it needs some work. This could be a great home improvement project, and increase the value of your investment.

However, before you decide this project will translate into your “dream home,” be sure to realistically evaluate the situation. Will you do the work on weekends, or in the evenings after work? Will you hire someone, and for how much? Can you live in a mess while you renovate, or can you afford to renovate first and move in after they’re completed? Sometimes people move into a home thinking they will complete the work in stages, not realizing what kind of long term time commitment this is. Prior to purchasing a home, prepare a detailed list of the work that needs to be completed, along with a realistic estimate of the cost.

Buying a home represents one of the biggest investments you will ever make, and that investment goes beyond financial considerations. You’ll want to give careful thought to your lifestyle needs, both now and in the future. The time and money you have available for maintenance is an important consideration for choosing the right home. Take a look at the entire picture before you purchase.

 

If you’re looking for Edmonton Homes for sale, the best place to start your search is with a top Edmonton Realtor with a quality Edmonton MLS search tool on their website.

Determining Your House Hunting Budget

When preparing your budget, you will want to discuss what resources you can allocate to mortgage payments, living expenses, and other financial situations. Your real estate agent can either help or recommend you to a financial professional who can assist with establishing a budget and reviewing your financial position. In addition, they may suggest some alternative methods to obtain financing, either through traditional lenders or other institutions.

To purchase a home, a down payment of as little as 5% down is required. Fortunately, Canada Mortgage and Housing Corporation offers a federal insurance program designed to help Canadians purchase their first home at an affordable cost. If you choose to put down 20% or more, you will not be required to have any CMHC insurance. Your Realtor or Mortgage Broker can provide additional details on this program.

To prepare a budget, collect the following:

• Credit card statements.
• Monthly rent or mortgage payments.
• Utility payments, including gas, water, power, and telephone.
• All other monthly expenses such as food, child care, dues, etc.
• Annual or semi-annual expenses such as insurance, car repair, and taxes.
• Allow for unexpected items such as medical emergencies, travel and education.
• Non-fixed expenses like medical expenditures for the last year. This will give you an estimate of average expenses of this type.
• Records or an estimate of personal expenses including entertainment, travel, etc.

Once you subtract your expenses from your total income, the amount left over is called your net worth. This will give you an estimate of your financial situation at present and will help you determine how much you can afford for a down payment. There are two types of costs in buying a home — the initial down payment and the ongoing monthly mortgage payments. The largest one-time cost is the down payment.

When purchasing a home, there are also many one time costs and monthly expenses that you will need to budget for.

Typical One-Time Expenses

• Mortgage application and appraisal fee.
• Property inspection, due at time of inspection.
• Legal fees, due at the time of closing.
• Legal disbursements, due at the time of closing.
• Property survey, sometimes provided by seller, due at the time of closing.
• Land transfer, deed tax or property purchase tax, due at the time of closing.
• Mortgage interest adjustment, if applicable, due at the time of closing.
• Home and property insurance, at closing and ongoing.
• Moving expenses, due on the date of move.
• PST (if applicable in your province) on high ratio mortgages.
• Realty Tax Holdback

Typical Monthly Expenses

• Mortgage payments.
• Maintenance, possibly in the form of condo fees.
• Property and content insurance.
• Property taxes.
• Utilities.

 

Those interested in purchasing Kitchener-Waterloo real estate are advised to visit a local Kitchener-Waterloo Realtor to get advice on how to create a reasonable budget for their house hunt.

New versus Resale Homes

There are advantages and disadvantages to both new and resale homes. Here are some of the characteristics of both that may help you make your choice.

New Homes

Advantages

• You may be able to upgrade or choose certain items such as siding, finish materials, flooring, cabinets, plumbing and electrical fixtures.
• The latest building code, electrical and energy-efficient standards will apply.
• A builder warranty is usually available in all provinces. This can be important if a major system, such as the plumbing or heating, breaks down.
• Unless you are a builder, warranties do not apply to homes you build yourself.

Disadvantages

• Neighbourhood amenities, like schools or shopping, may not be complete if the house is in a new development.
• There may be construction noise and traffic.
• There may be little to no landscaping or trees.
• The 7% GST applies to new housing. However, there is a rebate that covers homes to a maximum of 2.5% if the home is less than $450,000.

Resale Homes

Advantages

• It will probably be in an established neighbourhood.
• Landscaping is usually done and fencing installed.
• It may have upgrades such as a built-in swimming pool or finished basement.
• Tere is no GST unless the house has been renovated substantially, and then the tax is applied as if it were a new house.

Disadvantages

• Maintenance costs will likely be higher than for a new house.
• You may require a professional home inspector to check for structural or other problems, such as a leaky basement or faulty roof.
• You may need to redecorate, or even renovate.

If you’re thinking about renovating Fort McMurray homes, it’s a good idea to speak with a savvy Fort McMurray Realtor to make sure you understand which home renos will over the highest return on your investment.

How Much Can I Afford?

The shortest and best answer is: it depends. The most important factor are your gross household income, your down payment, and the mortgage interest rate. Lenders also consider your assets and liabilities. Your own lifestyle and debt comfort zone will also factor into your decision.

If you understand these variables, you can examine all your options and make the best possible choice for you and your family. The table below give you an idea of the maximum home price you can reasonably afford. These estimates take into account household income and the percentage down payment you have. They assume a 10% mortgage interest rate, average tax and heating costs in Canada, and the mortgage an average Canadian would qualify for based on 32% debt service ratio.

Household Income	10% Down Payment	Maximum Home Price	25% Down Payment	Maximum Home Price
$25,000	$5,400	$53,800	$16,500	$66,200
$30,000	$7,000	$70,000	$21,500	$86,000
$35,000	$8,600	$86,100	$26,500	$105,900
$40,000	$10,200	$102,300	$31,400	$125,800
$45,000	$11,800	$118,400	$36,400	$145,700
$50,000	$13,500	$134,600	$41,400	$165,500
$60,000	$16,700	$166,900	$51,300	$205,300
$70,000	$20,000	$199,200	$61,300	$245,000
$80,000	$23,200	$231,500	$71,200	$284,800
$90,000	$26,400	$263,800	$81,100	$324,500
$100,000	$29,600	$296,200	$91,100	$364,300

In general, lenders follow these two simple rules when deciding how much you can afford in monthly housing costs.

The first affordability rule is that your monthly housing costs shouldn’t be more than 32% of your gross monthly income. Housing costs include your monthly mortgage principle and interest, taxes, and basic utilities like water, heat and power. If applicable, this will also include half of the monthly condominium fees. Lenders add up these housing costs to determine what percentage they are of your gross monthly income: this figure is your Gross Debt Service Ratio.

The second affordability rule is that your entire monthly debt load shouldn’t be more than 40% of your gross monthly income. This includes housing costs and other debts such as car loans and credit card payments. Lenders add up these debts to determine what percentage they are of your gross monthly income. This figure is your Total Debt Service Ratio.

Based on these two ratios, lenders will advise you of the maximum home price they think you can afford. Keep in mind that most home buyers today keep their debt ratios comfortably below the maximums prescribed above. The lower your debt load, the more affordable your home and lifestyle will be.

 

If you need to work under a tight budget when purchasing Kitchener Homes or Waterloo Homes, it’s a good idea to get a professional Kitchener-Waterloo real estate agent on your side to help.

Things You Should Know About Condominiums

Condominiums can be great choices for first time home buyers, urbanites, or those with a smaller budget. But what exactly is entailed in owning a condo?

The word “condominium” actually refers to a type of property ownership rather than to a particular style of home, though most people understand it to be the particular style. Condominium housing are multi-storey residential buildings that contain multiple units, and can range in size from a dozen homes to over a hundred. They can be high rise buildings or walk ups with only three or four floors. Most of your walls are shared, and therefore maintenance of the building and common spaces is done collectively.

Condos can be attractive to first time home buyers because they are generally less expensive than single detached homes in the same neighbourhood. However, because maintenance is joint and supported by monthly condo fees that can range in price, it’s important to compare condo fees as well as prices before determining what will fit into your budget. Be prepared to pay monthly condominium fees on top of your mortgage payments. These condo fees contribute to the corporation’s reserve fund and go toward covering the collective costs of property maintenance, repairs, replacement and insurance.

When you buy a condo, you’re investing in something you own but also eliminating a lot of the maintenance usually associated with owning your own home, like yard work and snow removal. Condominiums can also offer extras you wouldn’t get in similarly priced single detached homes, like security systems, recreational facilities or meeting spaces.

Before you decide to buy a condo, look at some of their limitations. If a large yard is important to you, for example, a condominium is probably not a good choice.

 

Take some time to research condo ownership versus house ownership from this Fort McMurray real estate agent’s blog. If you’re relocating to Fort McMurray, you can search for Fort McMurray homes.