Thinking of Buying?
Congratulations! You have decided to purchase a home, or are thinking about buying one. You’ll be joining the ranks of thousands of families who realize that home ownership offers a number of benefits including building equity, saving for the future, and creating an environment for your family. When you own your own home, your hard-earned dollars contribute to your mortgage. The equity you earn is yours. Over time, your home will increase in value. Buying a home is one of the single largest purchases an individual or family will ever make and I am here to ensure that the process is as smooth and pleasant as possible.
FACTS TO CONSIDER:
- If you are 35 now and just buying your first home, you will likely be mortgage-free when you are 60 and sitting comfortably on a considerable asset.
- It’s highly likely your investment will appreciate considerably in 25 years. It’s important, however, not to buy with the intention of making a quick fortune.
- Think of home buying as a sound, long-term investment.
- Buying a home is a very effective way of saving regularly over many years. Even if you never buy into another retirement or investment plan, you are effectively putting money away for the future.
- Owning a home of your own means you and your family can set down roots, get to know your community and involve yourselves in it.
- Discover the pride of home ownership. You can fix the place to suit your particular needs. You can also have pets in your home.
- As your family grows and moves on to homes of their own, you will have the option of earning extra income by renting out spare rooms or floors, if local bylaws allow.
- If you are planning to borrow money from a bank or other financial institution, owning your own home is a definite plus when it comes time to negotiate.
- You may not need as much money as you think to get into the home market.
- Qualified buyers can buy a house with as little as five per cent down through the Canada Mortgage and Housing Corporation’s (CMHC) mortgage insurance scheme. You may also be able to use RRSP funds as part of your down payment
- With many kinds of investments, you have to pay a capital gains tax on profit you make. If your home is your principal residence, this tax does not apply.
Setting your budget
Before you start looking for your new home, you’ll need to have a good idea of how much you can comfortably afford. When setting a budget, keep in mind that your monthly mortgage payment is not the only expense to consider. Remember to take into account any credit card and installment loan payments, utilities, taxes and insurance.
Saving for your down payment
When you buy a home, lenders may require that you put money down. This is commonly known as a down payment. Down payments can vary based upon the type of mortgage and typically range from 5 to 20% of the home purchase price.
Pre-approval is a useful step to take before starting your search for a home. By sharing some information about your income and debt, a lender can provide you with a letter stating how much you’ll likely be able to afford to borrow. In a competitive home purchase market, sellers prefer offers from pre-approved buyers.