Buying A Vancouver Home 101
Buying a new home in Vancouver, is never a decision that should be made lightly. There is so much more to a real estate transaction than simply choosing a home and paying for it. There are many factors that should go into your decision
Let’s take a look at the basics – in other words, Buying a Home 101.
Is Now the Right Time For You to Buy a Home?
You may be eager to purchase your new Vancouver home, but have you considered the pros and cons of doing so at this time? If you’re considering purchasing your first new home, it’s wise to consider how much home ownership will change your life. A good realtor won’t just try to sell you a home. They’ll educate you on all of the facets of home ownership you’ll need to know in order to make the best decision for yourself. These facets include what the market is like, how mortgages work, how home ownership can impact your credit, and the pros and cons of owning vs. renting.
Think of buying a new home as you’d think of family planning. Are you ready for the responsibility? Do you have the time it takes to be a successful home owner? Are you equipped to handle your new responsibility should something go wrong?
These days, it’s a lot easier to qualify for a mortgage than ever before, with perks and benefits offered to first time buyers to entice them into the market. This isn’t a bad thing, however, it’s entirely possible to qualify for a mortgage that you may not actually be able to afford. Owning a home is a lot different than renting – as a renter, there’s far less responsibility to worry about because the property owner is generally responsible for repairs and maintenance. When you own your own home, there’s no ‘let’s call the landlord’ when something breaks. It will be entirely up to you to absorb the cost of repairs should something go wrong.
That said, it’s a good idea to make use of widely available tools such as the CMHC’s Household Budget, Mortgage Payment, Debt Service and Mortgage Affordability Calculator, that will help you to calculate what type of mortgage payment will fit your budget, and allow you to continue to build and save financially without leaving you penniless should you need to make repairs to your new home.
What Type of Vancouver Home is Best For You?
While we all dream of ‘upgrading’ from our current dwelling to something more luxurious, it pays to be realistic in your expectations and not go overboard. It’s important to consider your current living situation, and ask yourself why you are looking to upgrade. You may be a single professional looking to build equity in a property that you plan to rent out, or you might be a young family looking to put down roots in a nice safe Vancouver neighborhood where there’s lots of room for your kids to play and enjoy the outdoors.
Think first about what you need in a new home, then think about what you want, and think in the long term. After all, most mortgages will take more than a handful of years to pay off. So thinking about where you see yourself say, ten years from now, will help you to choose whether you’d like to buy a condo, a townhome, or a family friendly home with a big back yard, because a lot can change in ten years!
Understand the Buying Process From End to End
In order to qualify for a mortgage, you’ll need a considerable down payment. The percentage depends on where you live and who your lender is, but as noted, it’s much easier these days to qualify. Keep in mind that the less money you have for a down payment, the higher the cost of the mortgage in terms of interest and insurance fees as well as the length of the mortgage term. It’s always wise to begin saving early so that you have a larger down payment (try our Vancouver mortgage calculator).
Once you’ve qualified for a mortgage, you’ll have a solid understanding of what your budget is. This will help you to begin looking for a home the meets your needs and wants, but is still within your budget. This is where your realtor comes in. They’ll find Vancouver real estate listings that match your criteria, and will be your ‘voice’ when it comes to making an offer on the home, and negotiating the best deal possible for you.
If the seller agrees to your offer, your realtor will take care of all the legal documentation that goes into the buying and selling of a home, and you and the seller will agree on when you’ll be able to take possession of the home. Depending on the deal you agree to with the seller, you could be moving into your new home in a month! Then again, if the seller needs extra time to vacate the property and take care of any repairs or upgrades that are needed, you may agree to take possession at a later date. These are the fine details that a professional realtor will be able to take care of for you so that all parties are happy with the sale.
You Did It – You’re a Home Owner!
Once the deal is done, it’s time to prepare to move into your new home. Buying your first home is exciting and one of life’s biggest accomplishments! So enjoy the process of moving in and making the home your very own. But don’t forget – there’s no landlord now. It’s normal to want to spend a little bit of extra money putting your signature on the home, but keep in mind that now more than ever, you’ll need to continue to build your savings. Making a down payment on a home can deplete much of your nest egg, and while that’s what the nest egg was probably for in the first place, remember to put aside a little bit of money each month in case there is some type of emergency repair needed. Building equity is a nest egg all on it’s own, but it takes time. Life and unexpected expenses don’t wait, so it’s wise to be prepared.
This article provides a high-level overview of things to consider when thinking about buying your first home. For more details, contact Lorne Goldman today!