Buying Your First Home
  • Armonia Gala

Taking the Plunge into Home Ownership!

September 19, 2016

Couple looking at house in sky

Buying Your First Home

House hunting can be a daunting task, especially when it is your first time buying. Many different opinions are to be found in newspapers, online, and from family and friends. However, finding a simple explanation on the current options and market can be harder to find.Here is a good start on things to do when looking for your first home.

1. Finding a Lender 

Generally when looking for a home, it is a good idea to figure out your financials first. For most first time homebuyers in Canada, they will need to borrow money for their home. The money you currently have to go towards the purchase of the home is called a down payment, and the remainder that you would borrow to buy your home is called a mortgage. 

There are different mortgages, and people who have less than 20% of the purchase price of the home will be considered to be slightly higher risk for banks and other financial institutions. If you have less than 20% of the purchase price, you will be required to have Canadian Mortgage Insurance from the Canadian Mortgage and Housing Corporation (CMHC) or other body. This will be a small percentage that will be added to the purchase of your home to protect you and the bank from a loan default. 

Once you know how much you have to put down, you should meet with your bank, mortgage broker or other financial institution to determine a prequalification loan. This will be a quick look by your financial institution through your pay stubs, assets, and credit history to see how much you would be able to borrow for your purchase

2. Finding your Budget

The next step is sorting out your budget. There are many factors that can contribute to your home budget, including the size of your down payment and prequalification limit. When it comes to monthly payments, you want to be sure that you are not paying more than you can afford. Shop around for the best interest rate, as this can save you on your monthly payments, and will save you thousands of dollars over the life of your mortgage. You can do a fixed mortgage rate, which is where you sign on for a consistent percentage rate on your mortgage. You will often hear about these being 5 years, but other increments are also available. Fixed rate mortgages are great for knowing exactly how much your mortgage will be for an extended period of time. There are also variable mortgage rates, which are usually set a little bit lower than fixed mortgage rates. A variable mortgage means that your interest rate could go up or down at any time, depending on a number of factors. 

It is best not to stretch yourself to your absolute maximum budget right off the hop, as there are many other costs associated with homeownership to kind in mind. These costs include house taxes, home insurance, life insurance, home maintenance, and other fees, like condo and community fees.

3. Finding Your Community

Once you have figured out your budget, the fun begins! This is now the time to explore neighbourhoods in your city or town to see what you like. Are you looking for a busy urban centre? Are you looking for a quiet suburb? Are you looking for a community that is close to nature?

It’s important to know if you want to be able to walk to the store, or have a school nearby. Drive around and experience communities and see if you like how they look and feel, and if they contain what you’re looking for. Once your pick a community, the real househunting begins!

4. Finding Your Floorplan

Now that you have got all your ducks in a row, you are ready to look at homes. It is good to look at lots of homes to get a feel for what you like, what you don’t like, and what you can’t live without. Depending on your budget and community, there might be certain styles of home that you know you can look at before others.

The most common types of homes are condos, townhouses, duplexes, and single family homes, all of which are fairly easy to find in any community. However, each type of home has certain caveats, and of course, the bigger the home, the more expensive it is likely to be. 

Condos are often a great option when starting out, but townhomes and single family homes are often the best bang for your buck when it comes what you get for space.Condos often have added monthly fees, while many townhomes and single family homes are considered “freehold,” which means no extra added cost. They also have bigger floorplans, and bigger outdoor spaces. 

Buying your home is a big decision, so be sure to take the time, do the research, and budget wisely. These tips can help you make you feel more comfortable and contribute to you making the right decision for you.

In addition to homes for sale within Calgary city limits, there are also a number of communities offering a variety of home styles and amenities to suit any lifestyle, such as:

  • Boulder Creek Estates in Langdon offers a small town feeling, and lots of space for your family to grow with reasonably priced Estate homes and lots.
  • Heritage Hills in Cochrane is the perfect city escape with views of the Canadian Rocky Mountains, with townhomes and single family homes to suit any budget.
  • Spring Valley Estates in Airdrie is coming soon, and offers more variety with condos, starter homes, and estates.