Are you among the thousands of Manitobans who pay rent each and every
month, knowing that you'll never see that money again?
For many this need not be the case. Why not take income lost forever
to rent and build it into an investment that can last a lifetime? Right
now there are excellent opportunities for first-time buyers; mortgage rates
are low and there is an abundance of reasonably-priced starter homes on
the market.
Before you run out and start looking at homes, it is a good idea to
first take a look at what you need, what you want and what you can afford.
Whatever your taste and budget, there is a home out there for you. It will
just take a little planning and forethought to make your dream of being
a home owner come true.
What kind of home do you need?
Buying a home is never based on one specific factor; instead, it is
a balance of many requirements - things like family size, location, income
and lifestyle. REALTORS are excellent sources of advice and assistance
in these matters. Not only do they have the experience and knowledge to
make sure the choice you make will be the right one, but they also can
help you find the right property.
The first thing you need to do is decide exactly what you need in a
home. How many bedrooms? How close to schools or shopping? Do you need
a garage or finished basement? These kinds of questions can be itemized
in a "buying blueprint" that will serve as a guideline in your
search.
Next on your agenda should be deciding on a preferred location. City
or suburbs? City or small town? Town or country? City dwellers tend to
think that living in a smaller, outlying community would be idyllic, but
forget about the commuting factor. How will the roads be in the winter?
Do you really want to drive 45 minutes or an hour every day, winter and
summer to get to your dream home?
Once you decide on a general area you wish to live, you will probably
find that there are a good number of options when it comes to the age and
type of home you might purchase.
New homes are a good bet because of their extensive warranties and pristine
condition. On the other hand, you won't have mature trees or landscaping
- that is something you will have to plan and work at over a long period
of time.
Resale homes offer a great combination of affordability and character.
Many will include improvements such as finished basements or rec rooms,
decks or patios and mature landscaping. They may also come with repairs
and upgrading in the near future.
Townhouses and condominiums are obviously suited to particular lifestyles
or budgets. Maintenance is usually taken care of by the management and
upkeep costs can be low. Townhouse or condominium living often means sharing
common areas such as parking, hallways and landscaping.
Rural properties offer the ambience that many of us crave: green pastures,
wooded areas, friendly community and safer streets. These plusses must
be weighed against more limited services and additional commuting time.
What can you afford?
Once you have determined what it is you want and need, you will have
to find out what you can afford. It is crucial to avoid a situation referred
to as "house poor". Many homeowners have found themselves in
a state where the costs of paying for the home are so burdensome that any
enjoyment is outweighed by the pressure of the monetary commitment.
So the first thing to do is set a maximum price range instead of just
an upper price. It is not always wise to buy the most expensive home you
can afford, but better to aim lower in anticipation of extra costs or fluctuations
in your income.
What you can afford will be based on two things: the amount of your
down payment and the maximum monthly payments. Obviously, it is preferable
to make as large a down payment as possible; this will keep your payments
down and save money in interest costs.
A REALTOR or your financial institution will determine the amount of
the mortgage you can carry by calculating your debt-service ratio. The
rule of thumb is that the sum of all your current loan payments (car, personal,
credit card, etc.) plus your mortgage payment should not exceed 40 per
cent of your gross income. In addition, mortgage payments and property
taxes should not be more than 30 per cent of gross income.
Buying your first home may seem intimidating in the beginning, but with
careful planning and a clear idea of what you want, home ownership can
be a joyful reality for you and your family.
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and describes a real estate practitioner who is a member of the Association.
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