The Dollars and Cents of Buying Your First Home



Cost is, of course, the primary consideration when buying your first home. You need to sit down and do a thorough evaluation of your financial status, factoring in any outstanding loans, your salary and job security, and your savings. Once you have done this you can come up with a pretty accurate idea of the amount of down payment you can make, if any, and the monthly payments you can afford.

When budgeting, remember those added costs that most first-time home buyers tend to overlook. You need to add property taxes, insurance, and utilities to your monthly bills, condo fees (if applicable) and any possible increases in commuting costs if you plan to move far from your workplace. Additional expenses will be tacked onto your purchase price too ? land transfer taxes, title searches, home inspection costs, lawyer's fees, and real estate agent fees.

And if your down payment is less than 20%, you will need to buy mortgage insurance.

Don't forget the extras too. Buying your first home often means buying your first fridge, stove, washer, dryer, and even a lawnmower and barbecue!

Loft, Semi, Town, Detached?

Costs are your number one concern, but you also need to consider lifestyle. Sure that downtown loft is great, but what if you are planning a family soon? Can you see yourself and kids in a small apartment? Maybe the suburbs are cheaper, but are you willing to deal with a longer commute to work?

Many of us imagine owning a single-family, detached house, but with the price of real estate these days, you have to ask yourself how far you are willing to go to get that dream home. Maybe you can find a semi-detached or townhouse that is more conveniently located. Speaking of location, how important is proximity to shopping, schools and parks? Do you want a backyard, or is a small deck sufficient? Do you want to be in the city centre, or are outlying areas okay?

Be sure to answer these questions before looking too seriously into buying your first home. Having a clear idea of what you want and what you can afford will make your search for a home easier.

Questions On Financing Your First Home

If you are having trouble saving for a down payment, you may want to discuss your options with a mortgage professional. You may also have questions about the Home Buyer's Plan for first-time buyers, or land transfer tax rebates that may be available when buying your first home. Maybe you are concerned about your credit rating and the impact it will have on your ability to obtain a mortgage.

Your real estate agent may be able to put you in touch with someone who can help. You can also search for a reputable mortgage broker to guide you and answer your questions.