Home buyer tips

Buying a home for the first time need not be a daunting task. While the risk and commitment are real considerations, the leap is manageable. Here are some tips to keep in mind from B.C. Real Estate Association president Scott Veitch.

Decide what you can afford ahead of time

Traditionally, the rule of thumb is your monthly housing cost shouldn’t exceed between 30 and 33 per cent of your gross monthly income. This includes your monthly mortgage, t a x e s, he a t i n g expenses and utilities. And your monthly debt load — car and credit card payments and personal loans — shouldn’t be more than 40 per cent of your gross monthly income.

Develop your home wish list

Prioritize the features that you want in a property. Do you need a view of English Bay? A Viking range? Carpet in bedrooms?

Decide where you want to live

There are different neighbourhoods that may or may not work for you. Commercial Drive attracts artists, Yaletown is ostensibly for the upwardly mobile, while the West End is good for beach worshippers. Make sure you’ll be happy in your new area.

Start saving ahead of time

Factor in your closing cost. Will you have enough money for first year’s taxes, lawyer and transfer fees, and building inspections? These run between two and seven per cent of the home price.

Get your credit in order

Find out where you stand. Make sure you don’t have a large outstanding balance on your credit cards, because it will show up on your credit report. Figure out how large a mortgage you qualify for. T h a t ’s a f u n c t i o n o f y o u r credit and savings. There are different kinds of mortgages out there. Find one that fits y o u r n e e d s t h e b e s t . F o r example, as a first time buyer, if you don’t have enough for a down payment, you can use a homebuyer’s payment plan.

Calculate the cost of home ownership

Doing this will help safeguard against unforeseen c o s t s t h a t may c a u s e headaches down the line. Do your homework on things like mortgage taxes and condominium fees.

Consider buying smaller

You can always move up to a bigger home, but living somewhere outside of your means is a more difficult situation to be in.

Typical homebuyer mistakes not to commit:

Not asking enough questions.

Taking too long to make a decision on buying in a hot market.

Not choosing the right third party to help.

Making too many conditions in an offer.

(prepared by Maria Cootauco/Province)