Why buy?

Two out of three Canadian families own a home – that's one of the highest rates of home ownership in the world. And for good reason.

It's a great investment. And with increasing house prices over the long-run, it's all the more important for first-time buyers to get a foot on the first rung of the property ladder.

Did you know that...

• Home ownership is the single largest source of savings for Canadian households.
• Unlike other investments, which can be quite volatile, the increase in the value of homes is relatively steady. The average house price in Canada has increased every year since 1998.
• Homeowners can use the equity in their homes as security for other loans.
• Building equity in your first home is the first step on the property ladder. It gets you into the market, keeps you in touch with increasing house prices, and puts you in a good position to trade up to bigger and better houses as your circumstances allow.

From the moment you think about buying a home, start planning. One of the first steps on the road to purchasing a home is to save money for the down payment. Most people finance the purchase of their homes with a mortgage loan. Traditionally, financial institutions would only give mortgage loans for up to 80% of the value of the home, and therefore required a 20% down payment on the purchase of a home. However, with mortgage insurance, you can now obtain a mortgage loan for up to 95% of the value of the home with as little as a 5% down payment but many other options exists.

To qualify for a mortgage loan, you will be subject to a credit check. Request a copy of your credit report. Carefully examine it for errors, and clean it up before you talk to a lender. For at least one year prior to purchasing a home, you should ensure that every credit card invoice, rent cheque, car payment and other debt is paid in full and on time.

If you are you currently renting, check your lease for an early termination clause. If you'll be subject to penalties, try to time your closing with the expiration of the lease.

It's smart to ask your lender to pre-approve, rather than pre-qualify you for a mortgage. Pre-qualification only tells how much you can afford. Pre-approval goes a step further. Although not a final loan commitment, the pre-approval letter can be shown when bidding on a home. This information is important to the sellers since they do not want to accept an offer that is likely to fail because financing cannot be obtained. Once you determine how much you can afford to pay for a home, try to stay within your budget.

Look at many homes, including an assortment of types of homes. When you view a property, list the positives and the negatives. Don't stop your inspection at the property line. Examine the surrounding area. Is it safe, well maintained and moderately quiet? Is it convenient to work, schools and shops? Ask about zoning and that vacant lot across the street.

When you decide on a lender (a bank, your credit union, or a mortgage lender) and a mortgage, get every detail in writing, in particular, the lock-in rate, privileges and fees.

Read all the documents related to the purchase of the property, and have a professional review them. You're signing a binding, legal document.

Ready to go house hunting? I will gladly explain the options, and provide you with information detailing current market conditions, financing options and listings of available homes for sale.

contact me: 416-219-6662

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