Buying your first home can be exciting and stressful all at the same time. Those who have been through the process will tell you that there is a lot to keep in mind. First-time homebuyers looking at the real estate market today will have a different experience than those who purchase their first home 5, 10 or 20 years ago. After seeing a rapid increase, housing prices are finally stabilizing. The number of homes for sale has increased in many Canadian markets. This means today's first homebuyers have the advantage of choice over their predecessors. In today's changing real estate market, what do first time homebuyers need to keep in mind when purchasing their first home? Here are a couple important things to keep in mind to help you make the best investment:
Interest rates will eventually rise: despite a shorter amortization period, borrowing conditions are currently favourable to buyers. Interest rates have hit historic lows and first time homebuyers have the option to take advantage of this. Market analyst estimate that rates will remain low for the time being. The question, what will the situation looks like in 3, 4, or 5 years when it comes time to refinance your mortgage? In the future, interest rates are likely to rise again. After a drop like the one currently happening, it is an inevitable reaction for which first time homebuyers must prepare themselves for in order to avoid unpleasant surprises. First time homebuyers should not only carefully consider their ability to pay off a mortgage, but also ask themselves if they will be able to pay back higher interest rates. Remember that an increase of 1 or 2% can mean hundreds of dollars added to your yearly mortgage payments.
Keep your long-term plans in mind when choosing a home: the practice of buying a condo, living in it for a few years and then reselling it at an higher value in order to move into a house was common practice in decades past. For first time homebuyers, this may not be an option. Home prices are rising, but much more slowly than they did 5 or 10 years ago. Prices have also gone down in areas that are now heavily populated with condos. Since many of today's first time homebuyers can't count on turning around a property quickly for profit, it is to their advantage to choose a first home that they can comfortably live in for several years.
Evaluate several options before buying: as the real estate market has grown, so has technology that surrounds it. First time homebuyers now have access to more tools that help them find a home best adapted to their needs. The information buyers need to make the best investment has never been more accessible, and first time homebuyers are better informed than ever about how to conduct real estate transactions. In a situation where the number of houses for sale is higher than demand, it is in buyers' interest to use all the information that is available to them to find the ideal homebuyers' are looking for. Buying a first home is a substantial investment, and being able to take your time and consider your options carefully is a big benefit. In a buyer's market, first time buyers should take the opportunity to visit lots of houses and consider all the possibilities before buying their first home.
CENTURY 21 Miller Real Estate Ltd.
Brokerage Independently Owned and Operated
#4 Office in Canada
By Production CENTURY 21 Canada 2013
467 Speers Road,
Oakville, ON L6K 3S4