Tips for a first time home buyer

[223MB]

What are some words of wisdom you folks have for a first time home buyer?

[sns2]

1) Don't take out the maximum mortgage you can. Life will happen. Rainy days will come. Things will break down. You want to be able to have a few bucks to live.

2) Get an inspection unless it is brand new.

Best of luck!

[Arty]

Don't buy.

(The 1950's and 60's are over).

[Newview01]

Originally Posted by Arty

Don't buy.

(The 1950's and 60's are over).

Why not?

Easiest way to gain equity.

I feel sorry for those struggling to put together a down payment and are stuck paying more on rent than what their mortgage payment would be.

X2 on getting an inspection.

[Arty]

Originally Posted by Newview01

Why not?

Easiest way to gain equity.

I feel sorry for those struggling to put together a down payment and are stuck paying more on rent than what their mortgage payment would be.
[...].

Hardly. The best way to 'gain equity' is to save your money and invest it so that YOU are getting paid interest, instead of paying out blood money on interest and overpriced accomodation at peak prices. Housing which will need a bulldozer by the time it's paid off (if ever).

Then you are stuck paying hundreds of thousands of dollars interest to the bank on top of massively overpriced RE, spiked by artificially low interest rates. Don't you read the financial press at all?

Cheap interest and inflated money chases up capital prices, leaving you holding the bag when interest rates swing back up again to normal. Same as bond prices.

[Trochu]

-Don't buy the most expensive house you can "afford";
-New or not, get an inspection; and,
-Don't buy the nicest house in the neighbourhood.

[airbornedeerhunter]

If you buy new, research the builder. Some are great, some are good, some are ok and some are scumbags.

The guy that built mine is great, the poor neighbour 2 doors down bought from a builder who has since been banned by the developer and has at least 3 pending court cases against him from people he has screwed.

Do your homework.

[hilt134]

Don't?

Well the first thing to decide is if you are going to find a great house or fix one up. If you are going to renovate get it done fast it's incredibly stressful. Also get your self someone you trust toook with you. They have to have some experience with homes and what to look for.

If you have some questions ask around the neighborhood things like mold or mice can be more common is certain areas. Also it's a good way to find out what the areas like.

If the house has a basement take a bit of time and check it out. Rum the furnace of you can as the last place I rented only stank like mold and mildew once the furnace pumped the air through the basement where I lived. Take a look if you see any bugs and learn why they are there as certain species like damp or dry.

[jungleboy]

Originally Posted by sns2

1) Don't take out the maximum mortgage you can. Life will happen. Rainy days will come. Things will break down. You want to be able to have a few bucks to live.

2) Get an inspection unless it is brand new.

Best of luck!

Be aware that many home inspectors are not as qualified as they would like you to think. We recently sold our 3 yr old modular and the inspector they hired was a complete failure. He told the perspective buyers that the roof vents were not cut in , the insulation was insufficient . We called the dealer we bought from, who quickly sent out a contractor to fix these issues.
It turned out to be completely unfounded and incompetence on the part of the inspector. There was absolutely nothing wrong with the home but it nearly cost us a deal.It did cost me out of pocket to pay for their stupidity.

I think a lot of these inspection companies feel that if they scuttle a few deals it is good for business as they will be called to inspect the next home since they "saved the buyer" from the last deal.

[223MB]

Thanks for the advice so far! I’ll add we are hoping to get a place in a smaller community like leduc, Devon or calmar. We aren’t really interested in new as the newer communities are too crammed. A acreage would be awesome but the costs associated with them could be too much.
Does anyone have any experience with buying a piece of land and putting a modular home it? Is it a cheaper alternative?

[fishtank]

calmar is probably the cheapest in price , consider its on about 15 away from Devon for shopping and grocery’s , make sure it well inspected especially the basement and foundation if it’s older Home . Budget for some upgrade repair, taxes , insurance , furnace , roof, windows etc and extra cost associated with being a home owner ...

[Fwee6]

Spend the money for high quality windows.
We got double pane junk in our build from 3 years ago.

[Rustynail21]

Find a good Mortgage Broker or Banker and get an idea on what you can afford. With the new rule changes that just happened Jan 1st have someone run the numbers. They'll also be able to help you find a Realtor. Use a Realtor, even if dealing with a builder, they'll protect your deposit should something happen and it doesn't cost you anything.

These two people will be worth their weight in gold!

Also don't forget about the homebuyers program, use your RRSP to help supplement your downpayment. It can save you a fortune on CMHC / Insurance fees depending on your savings.

Go biweekly on your payments if you can, knocks years off your mortgage.

I'm in the industry and am available via PM. I don't deal direct to consumer so I can be unbiased and will give you the straight goods if you have q's or want to name drop.

[AndrewM]

Put 25,000(max if I remember correct) or less of your downpayment into RRSP’s and then remove as a first time home owner. Needs to be there 90 days if I remember correct. Basically you take a loan from yourself and you will get money back from taxes. Put that money back into your RRSP or towards your house.
Try to put down enough to avoid CMHC fees. If you sell your house you do not get that money back. It’s a fixed amount of interest and you will have to pay it on your next purchase as well unless you get put down enough.

[Alex1272001]

This is a buyers market. Don't be shy about negotiating prices. Don't let a pushy real estate agent pressure you into offering more then you feel comfortable with.

[DiabeticKripple]

I too will be buying my first home towards the end of summer / fall. I’m trying to save up the 20% for the down payment to avoid CMHC insurance. That insurance is like lighting a match to your money.

[Newview01]

Originally Posted by Arty

Hardly. The best way to 'gain equity' is to save your money and invest it so that YOU are getting paid interest, instead of paying out blood money on interest and overpriced accomodation at peak prices. Housing which will need a bulldozer by the time it's paid off (if ever).

Then you are stuck paying hundreds of thousands of dollars interest to the bank on top of massively overpriced RE, spiked by artificially low interest rates. Don't you read the financial press at all?

Cheap interest and inflated money chases up capital prices, leaving you holding the bag when interest rates swing back up again to normal. Same as bond prices.

How is paying $1500 on rent a better decision than paying an $1100 mortgage payment?

[Sporty]

If you plan to work with a realtor, do your homework. One who will really look out for your best interests and not just the commission number they'll make. Our latest realtor was fantastic, she'd show us homes and then the "mom" would come out and she would give us the real pros and cons of the property. From price to the area the property was in. She could have encouraged us to purchase the most expensive property we looked at but with her solid advice, we went a different route.

[Prairiewolf]

Originally Posted by 223MB

What are some words of wisdom you folks have for a first time home buyer?

First off, congratulations. Being a homeowner is awesome but buying a house was the most stressful thing I've ever done. Things I wish I'd listened to more include:

*Try to stick to your budget, but understand that what is truly expensive is buying alot of homes. If you find one you really love (more on that below) get it, you'll end up buying it at some point.

*Understand what you are and are not buying. A brand new house always looks shinier, but fences, decks, and landscaping add up quick.

*Make an inspection a condition, even if its new. You'd be surprised.

*Don't sign on for just the lowest rates you can with mortgage broker, understand the fine print like double up payments, lump sums etc. Those make a difference sometimes.

*Don't rush - they're making and selling these every day.

[58thecat]

Completely depends on your financial situation...if you got a few bucks buy a fixer upper or a rental place in which you can life in and rent out a space helping cut over all costs and the fixer upper is a no brainer, location, potential to turn over with a little elbow grease and then sell, move into another type property and repeat. I guarantee well under 20 years you will be mortgage free in a house that you completely enjoy and then put that would have been mortgage payment away into a plan for retirement, emergency funds and ihhhh yeah trips and a few toys....not hard to do. Break it down into 5 year plans, stay the course and you would be surprised how time fly's by and you own everything and then some....

[223MB]

Lots of talks on RRSP’s for the down payment. I currently don’t have RRSP’s as I use have a good pension. most of our down payment is in TFSA’s.

[Newview01]

Originally Posted by 223MB

Lots of talks on RRSP’s for the down payment. I currently don’t have RRSP’s as I use have a good pension. most of our down payment is in TFSA’s.

That's good. Better than RRSPs as no need to pay them back.

[BUSHRVN]

Originally Posted by fishtank

calmar is probably the cheapest in price , consider its on about 15 away from Devon for shopping and grocery’s , make sure it well inspected especially the basement and foundation if it’s older Home . Budget for some upgrade repair, taxes , insurance , furnace , roof, windows etc and extra cost associated with being a home owner ...

Calmar has seriously over inflated taxes.

[sewerrat]

Find a realtor that works for you, he /she should be looking for flaws and poking around in the house and not just stand there and tell you all the positive things about the place.

In the conditions get your sewer line scoped which is an extra cost on you but it is worth it. Specially if the home is from the 40's 50's 60's and 70's. abd even the 80's

I'm so glad I did it with my current house as the old clay tile sewer was loaded with root and cracks. So I got a new sewerline out of the deal which was a 60/40 cost between the seller and me.

[fishtank]

Originally Posted by Newview01

How is paying $1500 on rent a better decision than paying an $1100 mortgage payment?

That depend on your down payment and mortgage and the cost of repair and maintenance and property taxe$$$$ etc...) vs rent amount

Originally Posted by BUSHRVN

Calmar has seriously over inflated taxes.

Didn’t know that... property taxes another thing to consider on becoming Home owner...

[BUSHRVN]

Like most have said, don't go big. That "Castle" gets really old really fast when all you can afford to do is sit in it and stare at the wall because you haven't got a dime left to buy a Tims even. Forget about the Jones's, buy something that is VERY affordable for your budget and upgrade later when you have built up equity. I have watched too many family members buy castles that are their first homes and loose them in a few years due to the stress and a hick-up in their income. Very sad to watch from the sidelines. Buy a house for you, that's practical and not to impress anyone else.
And definetly make sure it's inspected by a REAL inspector, this could save you in such a serious way.

[D4l3k]

Prices are still going down especially for what you are looking for

I have been on the look out for a year or so and I'm glad I didn't buy a couple of the places I looked at since they have decreased in value by about 50-80k in the last 6 months with no sign of it stopping

My real estate agent (who is awesome) suggests waiting for it to bottom out more, lots of over priced garbage out there

[densa44]

I've done this a few times. I don't think that I would recommend it for a rookie. You can get very nasty surprises with things like wells, power, gas lines, and septic tanks. Maybe even a pump out tank.

If you want to live on an acreage, try the rent first advice. The majority of people only last 18 months (one winter and the prospect of the next one!).

BTW we have lots of experience at this sort of thing and are old. We bought a 1/2 section, took first parcel out, got piped water from the county for $10K and used the power and gas that was there from an old homestead. We bought a RTM house, with no basement.

We are snug as bugs in a rug.

I think much of the advice is pretty good. Arty's advice might turn out to be good too, it is very hard to predict the future. Home ownership has more features than just money.

[artie]

I was able to pay weekly and it cut the years down from 20 years to 13 years. The only problem is a few months have 5 weeks in them so it was tight. The way I looked at it pay monthly or weekly it amounts to the same stress. Had some friends who the first 5 years they put all the money they could on extra payments and it helped them pay the house off sooner. You are not there yet but do not retire until your house is paid for or you might lose it. Also try not to have other payments like new car payments.

[223MB]

Originally Posted by artie

I was able to pay weekly and it cut the years down from 20 years to 13 years. The only problem is a few months have 5 weeks in them so it was tight. The way I looked at it pay monthly or weekly it amounts to the same stress. Had some friends who the first 5 years they put all the money they could on extra payments and it helped them pay the house off sooner. You are not there yet but do not retire until your house is paid for or you might lose it. Also try not to have other payments like new car payments.

Both of our vehicles will be payed off in the next 6 months. We made sure we don’t have any debts going into our home purchase.