Purchasing a home in Calgary?
WE’VE PREPARED A HOME BUYER’S GUIDE FOR YOU
Your home is the single most important purchase that you will make. It will affect your family, your finances, and your lifestyle.
Whether this is your first real estate purchase or you’re an experienced buyer, this decision must be made carefully.
We’ve prepared the following guide to assist you when purchasing a new home.
Buying Your First Home?
There are special programs that may apply to you, and you may like a little more detail on what you should be doing for preparation! So… #join the club!
Are You Ready to Buy?
Property ownership is an excellent investment whether you’re looking for your dream home or to expand your investment portfolio. Owning real estate is one of the least risky ways to build equity — as long as you’re financially ready. The Canadian Mortgage & Housing Corporation (CMHC) recommends some things that you should consider when deciding to buy:
Your home can provide you with financial security due to capital appreciation— as the value of your home increases over time, so does your equity.
Added financial responsibilities such as: coming up with the down payment, making regular mortgage payments and ongoing costs associated with home ownership can tie up a lot of you cash and put stress on your finances.
Keeping your home in good shape requires time and money.
You alone are responsible for payments, repairs, and maintenance.
You can decorate or renovate your home to meet your family’s needs and personal tastes.
Why Do You Want To Buy?
Are you tired of paying rent? Have you decided to pay your own mortgage and not your landlord’s? Have you outgrown your current home? Are you looking for a rental property? Would you like a larger yard? Would you rather live in a different area? Do you want to shorten your commute?
Having a clear sense of your reasons for buying will help you choose the right property.
Preparing To Buy
Now that you’ve decided that home ownership is right for you, you will need to determine if you are financially ready. At this point it’s a good idea to take a look at your entire financial picture.
You should be prepared and fully informed so you understand your financial responsibilities in the future.
Deciding to Buy
People have a lot of different reasons for deciding to buy a home.
Some are first time home buyers looking to step into their own space, while some are buying to accommodate a growing family, and others still are seeking a sound investment or to downsize from an existing home.
The first step in the home buying process is knowing why you’re buying so you know what you’d like to look for.
Get a Financial Overview
How Much Can You Afford?
There are two general affordability rules that will help you figure out what you can afford on a monthly basis in your current financial situation:
- Your monthly housing costs shouldn’t be more than 32% of your gross household monthly income. Monthly housing costs include: mortgage principal and interest, taxes and heating expenses. This is known as your Gross Debt Service (GDS) ratio.
- Your entire monthly debt load shouldn’t be more than 40% of your gross monthly income. This includes: housing costs and other debts such as car loans and credit payments. This is known as your Total Debt Service (TDS) ratio.
These numbers help you to determine your overall financial health. They’re also part of what your lender will consider when determining how much you can be approved for.
Check Your Credit Rating
Your credit score will have a huge impact on what type of property you can buy, and at what price.
It is first recommended to check your credit rating either on your own or with an experienced lending institution so that you can determine what you can afford. The lender will research your credit ratings from the two credit reporting agencies Equifax and Trans Union or you can go to them directly online. We will be happy to recommend experienced, knowledgeable lenders in the residential real estate market.
Get a Mortgage Pre-Approval
Having a pre-approved mortgage amount makes the search for your new home much easier and less time consuming because you have a good price range in mind. There a few pieces of information you will need to have handy the first time you meet with a lender:
- Your personal information including identification such as your driver’s license.
- Details on your job, including confirmation of salary in the form of a letter from your employer.
- Your sources of income.
- Information and details on all bank accounts, loans and other debts.
- Proof of financial assets.
- Source and amount of down payment and deposit.
- Proof of source of funds for the closing costs.
Time to Go Shopping
Once those preparations are out of the way, it’s time to find the right property for you. You’re likely to spend years in your new home, so finding the right one is crucial.
Take a Drive
Get to know the communities, complexes, or subdivisions, which interest you. Drive around and get a feel for what it would be like to own a property in the area. Start getting a sense of the amenities available in those areas.
Narrow your Search
Select a few properties that interest you the most and have the YYC Club make appointments to visit them.
Time to Buy
Once you have picked out the property you want to purchase the YYC Club will help you make an offer that the seller will accept. The YYC Club will investigate the potential costs and expenses associated with the new property.