NAVIGATING THE PROPERTY LADDER MINEFIELD?
Having served many clients over the last 10 years, here’s some sound advice for you brave First Time Buyers.
SET YOUR SIGHT ON THE PRIZE
Have you really considered your goals? What is your BEST case scenario? We always ask these two question when meeting with first time home buyers. So often, the enormity of mortgaging hundreds of thousands of dollars descends on first time buyers and can cripple or even paralyze the process. Many buyers start looking at properties that really don’t meet their needs or future goals, just because they don’t know what they can afford.
Maybe its cliché but Information is POWER. The sooner you can establish the monthly cost of a purchase, the sooner you can compare it to your current monthly out goings. Rent vs buy. One path builds you equity, while the other builds someone else’s. Lets take for example the monthly cost of mortgaging a $400,000.00 property in the Calgary area and compare it to rental costs for a similar property.
With current 5 year fixed Mortgage Rates swimming around 2.5% and a minimum 5% down payment, you would be paying under $1800 Principle and Interest monthly. That’s the low end of what rent would cost for the same property.
KNOW YOUR LIMITATIONS
With your goals in mind and having considered your BEST possible outcome, what’s the next step? We really can’t stress this enough. GET PRE-APPROVED! This will save so much time and heartache and often give you the upper hand in negotiations. Knowing what you can afford and having your financing in order will be a much more attractive offer to a seller than someone who hasn’t even started crunching numbers.
Life happens, opportunities present themselves and your goals may change. Your first property purchase is unlikely to be your last. Keep information flowing. No question isn’t worth considering. Could your first purchase be the beginning of a property investment portfolio? This takes us back to the first two questions we ask. Have you considered your goals; and what is your BEST case scenario? For most people, purchasing a property will be their biggest investment. Making sure your financial decisions keep you in line to meet your future property goals will always be key to a successful outcome