Tough Questions To Ask When Buying a Home
Home ownership is part of the Canadian dream, according to 90 per cent of Ontarians who participated in a recent study by the Ontario Real Estate Association (OREA). Achieving that dream however, requires serious planning, says Costa Poulopoulos, president of OREA.
“Buying a home is a major financial decision and maintaining it requires a great deal of discipline,” Poulopoulos continues. “Home buyers should be prepared to make some tough choices in this pursuit.”
Some of these choices include:
Condo, house or other: Before deciding to buy a detached or semi-detached house, a condo or other form of home, consider your lifestyle, current and anticipated needs, and your budget. It’s a good idea to create a prioritized list of features that you are looking for. Finding the right home involves balancing your “must-haves” with your “nice-to-haves”.
Fixed or variable mortgage: A fixed rate mortgage offers security and is guaranteed not to change for the term of the mortgage. A variable rate mortgage, on the other hand, offers possible long term interest savings, but with the risk of interest rate increases. The ‘right’ mortgage depends on your tolerance for risk, as well as your current goals and life stage.
More than, or less than, 20 per cent down payment: If you buy a home with anything less than 20 per cent down, you’ll have to buy high-ratio mortgage insurance. The lower your down payment, the more expensive the insurance. If you don’t want to pay mortgage insurance, you’ll need at least 20 per cent down. A bigger down payment also means that you’ll pay less interest in the long run.
Conditional or unconditional offer: In a multiple offer situation, some buyers might be tempted to waive all conditions in the hope of securing the sale. Conditions are in place to protect the buyer. If you decide to waive conditions on an offer that gets accepted, you’ll be in a bind if you have trouble securing a mortgage, or end up with a home that needs costly repairs.
“It doesn’t end there,” adds Poulopoulos. “As a home owner, you’ll be faced with choices every day. But we believe that the sense of pride, security and the long-term investment value that comes with home ownership, makes it all worth it.”
More information is available at www.wedothehomework.ca.