Thinking of buying...but where do I start?
Owning a home, whether it be a studio size apartment or a large house, will be one of your most fulfilling accomplishments. But just like anything worth having, getting there will take some work. Here is what you need to do:
Save up for a downpayment. Condo prices in the Greater Vancouver market vary depending on the sub-market, but be prepared to have a minimum of 5% of the total price ready. Average first time downpayments are $15,000 - $40,000.
Get in touch with a mortgage specialist and get pre-approved for a mortgage. Although pre-approval does not guarantee approval, it will provide you with some direction. This is a crucial step; without knowing your accurate price range, you could be looking at homes that are unaffordable, or at homes which you think are at the peak of your affordability when in fact, they're not. Getting pre-approved and eliminating the uncertainty is the first step to an enjoyable experience. This is your first home, do it right.
3: MONTHLY PAYMENTS
When looking at mortgage information, pay close attention to the monthly payments. Mortgage Insurance may be required by the CHMC (Canada Mortgage & Housing Corporation). Check and see if the total monthly payment is inclusive or exclusive of insurance.
If you are currently renting, compare the mortgage payment to your current rent, add approximately $250 a month for maintenance fees which apply to strata properties (condominiums/town homes). These fees are taken in by the strata management company and are used towards regular and unforeseen maintenance costs. They often also include natural gas(hot water, fireplace, gas cooktop) and sometimes additional services such as Internet, phone, and television.
Total monthly Payment =
Mortgage payment (interest + principle) + Maintenance + Utilities
4: BEGIN YOUR SEARCH
Now you’re ready to search! Call your Realtor up, he/she will help guide you through the remainder of the buying process and show you the best properties that meet your criteria. Your agent should work closely with you to transform your budget, list of needs and wants, and other requirements into tangible properties which you could realistically own.
Q: What is Property Transfer Tax and do I need to pay it as a first time home buyer?
PTT is 1% on the first $200,000 + 2% on the portion greater than $200,000 of fair market value.
You MAY be exempt from the tax as a purchaser if you meet the following requirements:
- Property value is less than $425,000
- Property will be used as your primary residence
- You have never owned an interest in a principle residence anywhere in the world
- You are a Canadian Citizen
Click here for a detailed list of requirements from the Government of BC Website
Q: How do I know if the CHMC requires insurance on my mortgage?
Mortgage insurance is required where the down payment is between 5% and 19.99%. If your down payment is 20% or greater, you will not need mortgage insurance. The insurance premiums vary depending on the mortgage amount, the downpayment amount and the amortization period. Additionally, for homes above $1 million, mortgage insurance is unavailable and therefore downpayments need to be 20% or greater.
If you have questions regarding pricing in specific areas, mortgage requirements and regulation, or any other questions regarding first time purchases, feel free to call or email me anytime.