10 Tips for Buying Your First Home in 2011
The thought of buying your first home can be very overwhelming. The mortgage rules are changing what seems like monthly, the media is telling us the bubble has burst, is going to burst, might burst, or is not going to burst every other day!
I will be honest with you, there is no crystal ball that tells us what the Vancouver Real Estate Markets is going to do, however I can tell you we are is a great market for both buyers and sellers.
For Buyers, interest rates are still at record lows, this means getting into the market not rather than waiting 6 months can save you hundreds of dollars a month.
For Sellers, we have a number of buyers in all different price ranges looking to either get into the Vancouver Real Estate Market or move within. We are seeing well price properties go into multiple offers within days of being listed from Burnaby to Vancouver's West Side.
Here are some tips to get you started on the step-by-step process of buying a home from Michele Lerner at Financialedge.Investopedia.com:
- Check Your Credit Score Lenders base your mortgage qualification on a variety of factors, including your income and assets, your debt-to-income ratio, your pattern of savings and your job stability. But the most important factor in today's tightened credit world is your credit score. Lenders tie the interest rate you must pay to your credit score.
- Set Your Housing Budget A lender will tell you how much you can borrow, but each potential homeowner should create a simple budget for themselves with income and spending to determine how much they are willing to spend on housing payments. Financial experts recommend that homeowners spend a maximum of about 30% of their gross monthly income on principal, interest, homeowners insurance and taxes. Don't forget to budget about 1% of the home price for condo or homeowner association fees and maintenance costs.
- Start Saving And Stop Spending Once you have an estimate of your mortgage payment, start saving the difference between that payment and your current rent every month. In addition to building your savings, this allows you to get comfortable with a higher housing payment.
- Meet With A Lender Get pre-qualified for a mortgage loan before you look at homes so you can avoid falling in love with a home you cannot afford. You may be surprised to discover you can afford something pricier than you thought since interest rates are so low. Make sure you ask your lender about your variety of loan options and get an idea of how much cash you will need for a down payment and closing costs.
- Find A Reputable Realtor All buyers should have a realtor to represent their interests during negotiations and to help buyers recognize the value in different homes and neighborhoods. Your realtor should be experienced, knowledgeable and familiar with where you want to live. Trusting your realtor is vitally important to buying your first home. (For more, check out 5 Reasons Why You Still Need A Real Estate Agent.)
- Narrow Your Priorities Decide whether it is more important to you to live in a particular type of home (a single family home with a garage or a condo in a high rise) or in a particular neighborhood. If you cannot find or afford everything you want in your first home, you may need to make some compromises.
- Choose A Neighborhood Some neighborhoods hold onto their value more than others during a housing downturn. Work with a knowledgeable realtor to find a neighborhood that meets your needs - somewhere you will be happy as well as feel safe that home values are stable or rising.
- Make A Reasonable Offer If you love a house and don't want to lose it, don't make a low-ball offer. Some sellers are willing to negotiate and others are not. A trustworthy realtor can walk you through the process to make sure you are dealt with fairly.
- Have A Home Inspection Never buy a home without having it inspected. Not only are you looking for serious flaws in the home, but you can learn a lot about home maintenance and what to expect in terms of repairing or replacing systems as an owner.
- Finalize The Details After the contract has been signed, make sure to stay in constant touch with your realtor and your lender to be sure your financing is taken care of along with all insurance needs. A good realtor will have a checklist to make sure everything is accomplished in time for settlement.
The Bottom Line Buying your first home can be an exhilarating experience, provided you do some research, stay within a comfortable budget and work with reputable professionals who will guide you through the process.
As always, For all your Vancouver Real Estate Needs contact me anytime,
Morgan DuVernet
604.209.1230
www.morganduvernet.ca