If you’re thinking of buying your first home you likely have questions. What sort of home do I want? What can I afford to buy? What are the costs involved? What do I need to have as a down payment? What are the steps involved in buying a home? And I’m sure there are many more.
Buying your first home can easily become an overwhelming experience. Potential first time home owners, like yourself, often give up and continue renting long after they could have gotten into the housing market simply because they don’t know where to start. You have an advantage; you have found the right place to start…and the right person to ask.
The easiest way to work through the home buying process is to start at the beginning. Can you buy? Traditional mortgages require a 25% down-payment to qualify. 25% can be an impossible amount to come up with for a first time buyer. It is possible to buy with as little as 5% down if you qualify. This means you can get into a $200,000 condo for $10,000 down instead of $50,000 down. The first step is to talk to a mortgage broker or your bank to see if you qualify for a mortgage.
To qualify for a mortgage you need to speak to a mortgage specialist; however here are some general guidelines to give you an idea what you may be able to qualify for. Lending institutions require a TDS (Total Debt Service) ratio of 40%. This means, all of your bills combined such as your phone, cable, credit card, car payments, hydro, etc, plus your mortgage payments, cannot equal more than 40% of your annual gross income (before tax). Another ratio that is often used is GDS (Gross Debt Service) Ratio of approximately 30%. This means that your total mortgage payment, plus the property taxes for the property, cannot equal more than 30% of your income.
Once you have qualified for a mortgage it’s time to start looking for your first home. Fortunately for you, that’s what Realtors are for. We’ll meet and discuss what your needs, wants and desires are. There are, at any given time in today’s market, thousands of properties for sale. Only a small percentage of these will meet your needs. Part of my job is to filter through these listings, showing you only the ones that are relevant. I preview listings on a regular basis, so I may know of just the perfect place for you. And best of all, my services are free to you. My compensation is paid by the sellers, so you get a highly trained professional, well versed in contract law, mortgage financing, and all other aspects of buying your first home, at no charge. I will scour the listings, looking for the perfect place, eliminating homes that do not qualify. Have cats? No point in seeing condos that don’t allow pets. Do you have a green thumb? Probably don’t want a house with a north facing back yard. MLS.ca is an excellent resource for doing some background research, but the market moves so quickly that often when homes hit the mls.ca website they are already sold due to the nature of the server system used. I can build you a customized search website based on your personal criteria that will show you only homes that meet your criteria. The site is updated immediately, so if you log on, and a new place has hit the market in the last 5 minutes, you’ll know. You will also have new listings emailed to you as they hit the market, so the research will come to you, and you’ll be the first to know.
Once we have found the right place, for the right price, I will explain all of the steps, contracts and terms thoroughly so you understand what you are signing. I will negotiate on your behalf to get you the best price, and the best terms, and to ensure you are fully protected.
Most offers are accompanied by a series of subjects or conditions which must be met in order for the sale to complete. These conditions are generally for your protection and may include a property inspection, ensuring the financing is in place, ensuring insurance can be obtained for the property and any other conditions we need to put on the contract to protect your interests.
I have an extensive network of industry professionals including inspectors, mortgage brokers, and lawyers at my disposal that I can refer you to if need be to ensure the transaction runs smoothly from start to finish.
Closing costs are often overlooked when considering a purchase. These costs can range depending on the services required and the service providers required, however they usually range from $800-1500 and will include things such as inspections of the property, legal conveyancing fees (have the lawyers transfer funds and register documents at the land titles office), mortgage costs (these may be rolled into the mortgage), and additional services as may be required to protect yourself during the purchased. As a first time buyer you may be eligible for an exemption from Property Purchase Transfer Tax, saving you thousands.
After you are satisfied with the property and remove the conditions on the contract, it is just a matter of waiting for the possession date when I hand you your keys, and you have your house warming party.
Buying your first home is not as intimidating as it may seem. I will walk you through every step of the process, ensuring you understand everything from start to finish. Real Estate is probably the best investment you can make that balances risk with return on investment.
The best time to get into the market is as soon as you can afford to. Even if you don’t think you can, but would like to find out what you need to do to get into the position to be able to do it, give me a call and I’ll help you plan it out.