6 Useful Tips On How First Time Home Buyers Can Get Into This Hot Canadian Housing Market
Buying a home has become more difficult in this market, especially when you are a first-time home buyer. You may have been saving up for a down payment, but given how fast home prices are rising, that amount may not be enough anymore, and you may need help.
Here are some useful ways to enter the current red hot housing market:
Get help from parents
In this high-priced real estate market, more parents are helping their adult children with down payments for buying a home. The main reasons that parents help their children with purchase money, is that the former feel that house prices are too high, and their children are having difficulty in coming up with the down payment. Many parents’ homes have accumulated sizeable built-in equity over the years, and they don’t mind sharing with their children.
Whether it is in the form of a gift of cash or an interest free loan, getting support from the bank of “Mom and Dad” has made home ownership a reality for many first-time homeowners, who would have not been able to do so previously.
A real estate agent can negotiate for you and get you the best deal
A real estate agent is trained to negotiate. An experienced real estate advisor may be able to help negotiate a seller down on price, sometimes saving you thousands of dollars on the price. He or she may also be able to get closing costs waived or save you cash on other fees. Regardless of how much they can save you, you can bet that you will end up paying a few dollars less than if you were to negotiate on your own.
A real estate agent will help you find the right home within your budget
You may be interested in a certain type of home in a certain location. A realtor has deep insight into what’s selling and what’s not. He or she could guide you to make a more optimal choice within your budget, since the realtor has access to yet-to-be listed properties, access to data that shows comparable properties, and a lot of other valuable information that would certainly be helpful to you.
Make sure you use all the grants and government programs available
The government is aware of the hardships facing first time homebuyers and has developed programs that somewhat ease the burden of financing a new home, so it is important to be aware and take advantage of them. The Home Buyer’s Plan (HBC) lets you as a first time home buyers borrow up to $35,000 tax free from their RRSP. The First Time Home Buyer Incentive (FTHBI) is another program administered by the CMHC that helps you as a qualified first-time homebuyer reduce their monthly mortgage payments without adding the additional financial burden of repaying an RRSP loan. However, participants must meet minimum insured mortgage down payment requirements.
Incorporate a mortgage helper suite in your purchase plans
The plan here is to use the rental income from letting out a basement or a spare room, to offset the mortgage payment – hence the term mortgage helper suite. When the suite is fully compliant with the municipal zoning, the rental income can be used to add to yours, thus helping you to qualify for the mortgage.
Look for fixer uppers that may fit within your budget
If there is a home that is being sold for below the neighborhood average, chances are that it will require a lot of work to be done. This is a tricky decision to make, especially if you do not have any experience in this field. If you plan on doing the renovations yourself, keep in mind of the strain it may put on you and your family, especially if you have a full-time job. Also remember that renovations usually end up costing more than initially budgeted.
There is going to be no respite in home prices for the foreseeable future. If you are a potential first-time home buyer looking to get into the real estate market, our experienced real estate advisors will be able to guide you through this process with ease and comfort. Visit our website or call us on 604 913 1000.