Category Archive Home Buying

Lethbridge Mortgages - Buying a home

Are You Really Ready To Buy A Home?

Buying a home is a big step in a person’s life and there are many factors that must be considered before you can sign any agreements and move into your new space.As Lethbridge mortgage professionals, the team at Mortgage Worx Inc. – The Mortgage Centre deal with many first-time homebuyers on a consistent basis and are able to help clients evaluate whether or not they are truly ready to buy a home.

With interest rates experiencing some favourable lows over the past year, many first-timers are eager to enter the homebuying market. However, taking advantage of good interest rates shouldn’t be the main reason you decide to purchase a home.

There are many reasons why you may or may not be prepared to purchase a home and our team has identified some of these for you to review before taking the plunge.

Know what you can afford

This applies to a down payment and your overall mortgage amount. Before speaking with a mortgage broker or agent you should have a general idea of how much money you can contribute towards a down payment on a home.

As of February 2016, the minimum amount for a down payment on new insured mortgages increased to 10% for part of the home price for homes above $500,000 while those under $500,000 stayed at 5%. Typically, the majority of people choose to pay a down payment of 20% as anything under this amount requires the purchase of mortgage default insurance.

A Lethbridge mortgage broker at The Mortgage Centre can help you determine how much you can afford to put on a down payment as well as how much you can afford to pay monthly towards a mortgage so that you’re not breaking the bank right off the bat.

Don’t purchase based on anticipated income increases

Some homebuyers anticipate a future promotion or hike in their annual income and therefore believe they can buy a more expensive home. This is something to avoid doing for obvious reasons.

Not only do expected promotions or new job hiring’s go as planned, but there is also the potential for career changes. Things can change quickly and this is why you should never purchase a home driven by the expectation that you will be making more money in the future and can thus afford to get a higher-priced home.

You plan on staying for awhile

Purchasing a home is a big deal and a serious process, so if you’re not planning on staying at a home for at least 5 years, it might not be the right time to purchase. There are many people who purchase homes and end up moving within 5 years, however it’s wise to buy a lower-priced home that you feel you could sell quickly if needed should you not envision staying in it for a long time.

Set money aside for unexpected costs

Plumbing repairs, a broken air conditioner, a new roof and faulty electrical units. These are just some of the things you can expect to repair or replace if you stay at a home long enough.

In the case of such events occurring, having an amount of cash set aside strictly for these unexpected occasions can help you in the long run. This will undoubtedly bring you peace of mind and limit any stress caused by these events without throwing a wrench into your monthly budget.

Conclusion

By considering these factors, you should have a better idea as to whether or not you are actually ready to buy a home.

As we mentioned, the purchase of a home is a big deal. If you’re considering buying a home, talking with one of our Lethbridge mortgage professionals can help you get an advantage and ensure you are being looked after properly. Contact us today to learn more on how we can help with the homebuying process!

Source: http://www.investopedia.com/articles/mortgages-real-estate/10/ready-to-buy-house.asp

Source: http://www.fcac-acfc.gc.ca/Eng/resources/publications/mortgages/Pages/BuyingYo-Acheterv-10.aspx