There are many big financial decisions in life that need considerable planning and strategy. One such decision is buying a house. Whether you want to buy it for the personal use or looking for some benefits by investing in real estate market, you need to be careful in your decisions. While various things like amenities, locality, and other vital features are important, you should pay a special attention to the financial aspect of investing in real estate. Here are a few things you should consider:
Pre-Approval for Mortgage Loan
Unlike other commodities, a house comes at a lifetime cost. At the same time, you won’t like to compromise on the quality or design of your house just because of cost. A peculiar dilemma arises when you meet your perfect house, but the house is out of your budget. Then mortgage loans can get you rid of this fix so, it is important to have a pre-approval for a mortgage loan so that you can have an instant access to it when you need it immediately. In fact, there are some real estate agents who would hesitate to assist you in a house hunt if you don’t possess a pre-approval for mortgage as they are reasonably concerned about their efforts being wasted because of your financial limitations.
While the buyers do have a fixed budget in their mind, but when they hunt for the new house, many of them fail to divide the total budget into different phases. It is especially important in case when you opt for an expensive house. You would need to pay a specific amount of the down payment if you want to avoid the high-interest rates and shell out a considerable amount of CMHC’s mortgage default insurance. This figure calculated on the basis of mortgage size and down payment. Needless to say, the bigger down payment attracts.
- You may consider borrowing from other resources of the loan so that your overall mortgage loan size is less thus attracting lower interest.
- Borrowing from RRSP, your friends and company are some options that can help you here. You may also like to consider taking out some money from your investment products like insurance, mutual funds stock market.
Hire a real estate agent
There are a number of rules and regulations to follow when you invest in real estate in Canada. The worse thing is that you will be entitled to penalty even if you fail to follow a rule due to ignorance. Furthermore, these rules keep on changing. A property agent is well-acquainted with the central rules as well as state rules pertaining to property buying. Thus he is in a better position to guide you. Of course, there are other benefits too- you can get the bets prices, avoid bad buys and get a guided assistance to ensure that you acquire a home that perfectly satisfies your needs and objectives.
- Ensure that your property agent has good rapport with the departments as well as individual post holders like credit counsellors, inspectors, insurance agents, and state and government organizations related to real estate sector etc.
- A dependable analysis and solid forecasting will be added advantage that can help you a long way in getting the best deal.
Compromise reasonably to get lower prices
The first time buyers should also be ready to compromise reasonably. There are a number of properties in Canada that might not look attractive. However, the major benefit offered by such properties is the low prices. Depending upon their condition, age and other vital aspects, such properties can be available at fraction of the actual prices. As a first time buyer with financial limitations, you may consider buying these properties depending upon your needs. If the weak aspect of the property does not really interfere with your specific lifestyle, then you can consider buying such property.