Buying a real estate property is a milestone episode, which is worth celebrating. However, before popping up your champagne, you must consider a few factors.
By educating yourself on the following factors, you will be in a better position to wisely buy your first home:
1. Mortgage Options
As a first-time house buyer, you should be conversant with different kinds of mortgage options. You may talk to your lender regarding the fixed and variable rate mortgage options so as to choose one that can fit your comfort level.
You can as well shop around to get an interest rate you will be comfortable with. Lower rates may mean more cash will go towards your principal mortgage, whereas higher ones show you shall pay a lot of money as interest. Although this might make it look like you will pay low rates, there would be a catch in every low interest. This is why it’s always advisable to read the fine print. At times, lenders with low rates may charge high penalties when you’re incapable of repaying or break the mortgage agreement.
2. Insurance Expenses and Utilities
Ensure you put down a rough estimate for your insurance expenses and utilities so as to budget effectively. There would be nothing worse than realizing that you have spent thousands of dollars more over the things you approximated your monthly bills will be.
Always factor in things like the internet, insurance, water, sewage, and condo fees. You may also include the contents of insurance, fire, and property.
3. Real Estate Agent
Most first-time homebuyers commit the mistake of not assessing the real estate agent they want to deal with properly. It is important to take more time to talk to different agents so as to have a feel for a realtor who can properly represent your requirements. As far as negotiation is concerned, you may want to deal with a real estate who may go to bat on your behalf and put all your interests at heart.
Based on repcalgaryhomes reports, most homeowners read reviews of different realtors and set up a time to speak to them. There would be a need to talk to a few individuals, considering you will make the biggest buying decision of your lifetime.
The place where a home is located matters, so don’t make the buying decision based on the house alone. You need to also look for an affordable home in the best location and not a perfect house in an affordable neighborhood. Relocating to a nice neighborhood and conducting a few renovations can be a perfect way to increase the value of your home. Although it’s not a routine for every individual, searching for a house, which can use some love in a good neighborhood is a perfect strategy for investing.
As a homebuyer, you should learn more about the location before placing your offer on a property. Consider driving by on weekends or at night to determine the level of noise. You may also stroll around the community and talk to potential neighbors so that you might have a feel of what is nearby. This way, you will be able to relieve stress off your shoulders and avoid a lot of headaches.
5. Maintenance and Home Improvement Expenses
Some of these expenses would be off costs, whereas others will be ongoing. Therefore, be sure to determine if you will need to replace big-ticket items, such as roofs and furnaces, soon. If they need replacements, consider going for energy efficiency upgrades, which may lower monthly expenses.
You may also calculate general repairs and daily landscaping, which you might require to go forward. If possible, always set aside contingency funds so as to take care of unexpected maintenance, which comes with owning a house. This way, you will be well prepared for the unexpected.
6. Buying Price
It is unfortunate that there is a lot to consider when buying a house, other than just your offer or listing price. According to the Bank of Montreal, you may want to consider budgeting around 4% of the buying price so as to cover the closing cost. This means that, for homes costing around $400k, you will need to look at $15,000 in closing cost alone. Basically, this a huge amount of cash, so you may understand why you have to always keep the closing cost in mind when it comes to making a budget.
These figures are nothing but just a mere approximation, and there is a chance that your closing cost may not go beyond 4%. Depending on where you stay, the rate may fall between 2% and 4% of the buying cost.
In countries such as Canada, first-time homebuyers with a down payment may qualify for incentives. By taking part in a program, you will essentially be entered into a shared equity mortgage offered by the Canadian government.
When you decide to resell the property, you will need to repay the incentive support you got, depending on your house’s fair market value. The program may also provide 5% for first-time purchase of resale homes while 10% for newly constructed ones.
8. Common Subjects
Among the common subjects, you may see on contracts include subject to receiving, obtaining, and allowing property’s disclosure statement, title search, satisfactory financing, strata documents, and inspection report.
Although these are among the most common subjects, an offer may be subject to anything you may like, but don’t expect home sellers to settle for unreasonable deals. Consider speaking to your real estate agent regarding which subjects you need to include with your offer. If possible, you can also study the frequently asked questions on the subject removal to ensure you bring fresh ideas to the table.
In a Nutshell!
Buying a new home is an exciting yet strenuous endeavor. This is why it is important to consider factors like incentives, price, improvement, realtor, mortgage options, and neighborhood, just to name a few.
By doing so, you would be able to prepare for the unexpected costs and get confidence in buying a house you have always dreamt of.