Housing hunting

Buying a home is an exciting prospect. But before you take that step, there are many things you need to know to make a wise choice. The Canadian Bankers Association advises that most importantly, you need to take your time and do your homework.

The first thing to keep in mind is that buying a home is never a simple proposition. Not only do you need to consider your budget, lifestyle and location, you need to look at the many housing and mortgage options. Do you want a new home or a resale property? A detached home, a condo, a townhouse or a mobile home? Is it freehold or leasehold land? What about your mortgage? Do you want it open or closed? Long or short-term? Fixed or variable? Special features like pre-payment options, portability or assumability? What about mortgage insurance? What should you expect from your real estate agent, lender, lawyer, notary, home inspector and builder?

You should also monitor the market to see if prices are rising or falling and watch interst rates. The more closely you watch market conditions, the better your chance of getting the best investment for your money.

If it sounds complicated, it is. But by doing your homework and carefully looking at all of your options, you can make an informed decision about home ownership. Whether you decide to buy now, later or not at all, the more research you do, the more certain you can be that you've made the right choice.

Remember that having the down payment is just the first step; you need to be sure that you can afford the "extras" and ongoing costs of owning a home.

Also consider whether buying is, in fact, the right choice for you. We've often heard that buying is always better than renting. From an investment point of view, this isn't always the case. When comparing owning to renting, it's a numbers game: you have to add up all of the figures, including the cost of your home, the size of the down payment you require, utilities, immediate repairs, interest rates and insurance, and compare them to how much you spend on rent. Visit www.cba.ca or the Canada Mortgage and Housing web site at www.cmhc.ca for helpful worksheets and tips.

(Source: Vancouver Sun)