Buying a Home
Buying a home in Vancouver can seem like an impossible dream with a real estate market that is high relative to other cities, but with interest rates and mortgage financing as they are, buying a home is still possible. In many cases, buying a home is close to the same as renting.
When considering buying a home, here’s the situation that one couple recently found themselves in:
In early 2011, clients of Scott managed to buy a 1 bedroom place in the Commercial Drive area and have ended up having nearly the same monthly cost as they did while renting.
Many mortgage approvals only require a 5% down payment. As first time homebuyers, they were able to get the funds for the down payment from their RRSPs. Some banks are also willing to lend out the amount for the 5% down payment. Another creative way to make sure the funds are in your RRSP is to take an RRSP loan that will yield a tax refund, and give you enough money in your RRSP for a down payment.
The couple was buying a home with a mortgage of $265,000, the mortgage payment (payments vary based on your interest rate and terms, in this case interest 3.0% for 5 year closed mortgage) would be approximately $1059 per month. Condo fees are around $200-250. Once they realised that they were able to pay about $1275 per month to own, rather than $1250 per month in rent, the choice was easy. In addition, now that they were no longer saving up to buy a place, the extra dollars per month materialized quite easily.
Great financing information and calculating tools for first time homebuyers:
First Time Homebuyer Tools
Ways to save on your mortgage payments over the long term:
Save on Your Mortgage
Great way to see how much home you can afford:
Dynamic Mortgage Calculator
Find the current posted mortgage rates here:
Current Mortgage Rates
A first step is getting your finances in order to make sure that the bank will back your decision to buy. If you are working with a good banker, there are many creative ways (some mentioned above) you can make sure that your credit is good enough and that you have a down payment available. (Scott will be happy to recommend a great mortgage professional to ensure that you get the best service and rates.) A pre-approved mortgage is an ideal starting point.
The next big step is starting to look. Many buyers in this market can attest that you should choose a realtor who knows the area that you're looking to buy into for your search. The REALTOR® will have the experience to tell you about a building's history (we all know about leaky condos), as well as what to expect for the money that you're willing to spend. As well, the information that becomes available to the public does so after having been available to REALTORS® or at least a couple of days - it's a big advantage to know when new listings become available. Finally, as a buyer, there is no cost to you to use the services that a real estate agent offers.
One more thing that can allow you to end up with a nicer place that you might otherwise have gotten for your money, is a willingness to do some small renovations that can turn an otherwise less attractive home into something fabulous. If you can manage to look beyond the seller's current decor and see your furniture and decor, with your paint schemes, and something like new floors, it's really quite affordable. Installing laminate wood flooring and repainting an apartment can be done at a small cost and make it look like a new place!
This example is a good representation of what can be done by many renters. If you'd like more information, Scott is always available at 604-317-9595. If you are ready to start looking for a new home, Scott can be a fantastic resource.
Best of luck in your search for a new home!