Are You Ready For Home Ownership?
Owning a home may be your dream, but in order for the purchase to be the happy and satisfying experience it was meant to be, you need to ensure that you are financially and mentally prepared for the responsibilities that come with it.
Some people have a notion that home ownership is like renting, but with the power to have pets and paint the walls whatever colour you like. However, while these privileges are available to homeowners in most municipalities, they come with the responsibilities of a mortgage, taxes and home maintenance. Preparing for home ownership requires you to take critical stock of your finances and your expectations.
Questions for Prospective Homeowners
Are you ready to buy?
Owning your own home is much more than just being able to decorate any way you like. it's about a commitment to maintain your home over the years, realizing that part of your income and time will go towards updating, repairs and ongoing maintenance. It's also about taking more responsibility along with some risks that lead to the long term rewards of home ownership.
How much can you afford?
This is a key starting point. There is a balance point between purchasing a home that is well within your means and spending the maximum household income on the mortgage and other expenses to the point that home ownership becomes a burden. Something to consider: it may be better to buy a modest home now and look at purchasing your "dream home" in a few years.
What is your debt-to-income ratio?
This is an important concept that any mortgage lender uses as the basis to determine how much money to lend you for your property purchase. Your total debt servicing ratio (TDSR) should not be more than 40% of your household income, and your gross debt service ratio (GDSR) for your housing debt (mortgage payment, taxes and insurance) should not be more than 32%. If you are an employee, the income used in calculating the GDSR and TDSR is your gross income before deductions. If you are self-employed, the income used will be your net income after all business expenses and deductions.
What type of home do you really want?
Are you ok with cleaning your own gutters and cutting the lawn care? Do you like gardening and watering flowers in the summer? Are you someone that likes to travel or get out of town most weekends and would gladly pay a fee every month to have everything maintained for you? Do you mind living in higher density neighbourhoods that have apartments or townhomes rather than an attached or detached home? The answers to these questions can help you narrow down the search for the right type of home in your price range.
We Can Help
We're here to spend the time with you, guiding you through the complex process. Our real estate team is dedicated to helping you find the right home, at the best price. We want to make sure you're happy and satisfied that you've found the right home in the right neighbourhood!
When you hire us to help you buy your first home, we want to know what you want and how much you can afford. Then we'll find a way to merge these two priorities and find a residence that you'll enjoy owning.
Keep your objectives in mind when visiting a home. Sometimes the idea of owning a home can overwhelm your practical sense, so keep your feelings in check. Keep a list handy of the features that you need and want in a home, and judge each home by the list instead of by details that could distract you from your goal. When you're alone with your agent, you can go over the pros and cons of each home. We can help you stay on track while still keeping our eyes out for a great property.
Engage the services of a good real estate lawyer. We can recommend several Calgary lawyers who might be a good fit for you. Interview them to ensure that you get someone you can work with. The legalities of transferring land ownership can be dodgy, and a lawyer can be your best defence against future legal issues. Legal fees can run up over a thousand dollars, but the thousands of dollars saved in future litigation makes this a very justifiable expense.
Make the offer. This can be a maze of "buyer", "seller", "chattels", "deposits", and "completion date". We'll be happy to prepare the paperwork and go through it with you before submitting it. Remember, the seller may reject or counter your offer, so until there is an "accepted offer", avoid setting your heart on the home you hope to own. Once you have an accepted offer in place, you'll have to write a cheque for the initial deposit made out to the seller's broker.
Get all necessary inspections done. A home inspection is a must in today's home buying marketplace. It will identify harmful materials like asbestos, lead paint and mould plus uncover any issues or problems with the roof, furnace, appliances and much more. They'll also check for evidence of pests, faulty wiring and leaks. Not getting an inspection done means that you could be stuck in a home with a bad case of black mould and no recourse other than to pay for its removal. Inspections typically cost $400 to $700, and are absolutely worth the cost. There are several preferred inspectors we use that we'd be happy to recommend to you.
Do a final walkthrough before closing the deal and taking possession of your home. We'd be happy to do this with you to make sure that everything agreed upon in the purchase contract is completed prior to the signing documents at the lawyer's office.
From the first interview that determines your requirements to the moment that you receive the keys, we're there to help you with the complicated process of buying a home. Don't hesitate to contact us to find out more about how we can make the home buying process easier for you!
Contact us for more information about purchasing your home for the first time.