First time home buyers? Advice?

[Luke The Drifter]

So I've been thinking lately about how in the next year or so I want to buy my own place. Currently I'm 20, almost 21 and working full time with a steady job and decent pay (60k/yr+, probably 75-80k when I'm a journeyman). Any advice from those of you that have bought a house before? All I know is that a mortgage is a long term contract and nothing to take lightly. What does insurance cost? Property taxes etc? What should a guy do when looking at a place? Inspections? Ask the neighbors about previous owners?

I'd like to get a small acreage. Not a huge house but something I can live in comfortably and have a shop big enough to store the truck, toys and tools:d.

Any advice is appreciated!

Thanks

Luke

 

[blastoff]

Your on a good start by asking questions, once you have seen the home you think is best take a inspector with you or a real good carpenter that has a overall good head on his shoulder about the general building and quality of the house. Ins. will depend on your area & mill rate. Banks will probably want a inspection.
I guess the biggest thing take your time before investing.

 

[Ryeser]

So I've been thinking lately about how in the next year or so I want to buy my own place. Currently I'm 20, almost 21 and working full time with a steady job and decent pay (60k/yr+, probably 75-80k when I'm a journeyman). Any advice from those of you that have bought a house before? All I know is that a mortgage is a long term contract and nothing to take lightly. What does insurance cost? Property taxes etc? What should a guy do when looking at a place? Inspections? Ask the neighbors about previous owners?

I'd like to get a small acreage. Not a huge house but something I can live in comfortably and have a shop big enough to store the truck, toys and tools:d.

Any advice is appreciated!

Thanks

Luke

Make sure you speak to your bank first to see what money you can generate, I think a large down payment, weekly mortgate payments will help in the long run... make sure you can afford what you want... Insurance depends what you have and how far you are to the local fire department. Property taxes depend where it is and how much property. Make sure that it is inspected by someone that is truly qualified.

 

[j335]

So I've been thinking lately about how in the next year or so I want to buy my own place. Currently I'm 20, almost 21 and working full time with a steady job and decent pay (60k/yr+, probably 75-80k when I'm a journeyman). Any advice from those of you that have bought a house before? All I know is that a mortgage is a long term contract and nothing to take lightly. What does insurance cost? Property taxes etc? What should a guy do when looking at a place? Inspections? Ask the neighbors about previous owners?

I'd like to get a small acreage. Not a huge house but something I can live in comfortably and have a shop big enough to store the truck, toys and tools:d.

Any advice is appreciated!

Thanks

Luke

First see what you can afford and get a pre approval for a mortgage. This can be done over the phone and most real estate agents require this before they show you anything.
I'm 22 bought my first house this fall, worst thing is that its in Fort Mac so it was effin expensive!

 

[Orrin]

Only 20 and buying a house? I wish I had my head screwed on that straight at 20. When you get an inspector do not let your realtor hire the inspector, take the time and hire one yourself so there is no conflict of interest. Take your time when buying, look at 100 houses if you have to to get the right one for you, it's your money and your time thats important. Realtors do this for a living they shouldn't get impatient, seriously if the realtor starts pressuring you change realtors. Get preapproved at the bank so you know how much you have to spend and can eliminate houses that are above your budget. Consider getting roomates to defray the costs while you are young. I have 2 acres east of Calgary and a 2800' house, I pay $3600 in taxes and around $900 for insurance. Oh and don't get to picky, be prepared to put in some sweat equity, just make sure the mechanics of the house are sound.

 

[powerteker]

So I've been thinking lately about how in the next year or so I want to buy my own place. Currently I'm 20, almost 21 and working full time with a steady job and decent pay (60k/yr+, probably 75-80k when I'm a journeyman). Any advice from those of you that have bought a house before? All I know is that a mortgage is a long term contract and nothing to take lightly. What does insurance cost? Property taxes etc? What should a guy do when looking at a place? Inspections? Ask the neighbors about previous owners?

I'd like to get a small acreage. Not a huge house but something I can live in comfortably and have a shop big enough to store the truck, toys and tools:d.

Any advice is appreciated!

Thanks

Luke

All I can say is get a inspection give that to the bank. Than go through the house with someone u know will find problems...home inspections mean nothing, if they can't see a problem they say it's good! I found lots of stuff wrong with my home after the so called inspection!!!

 

[sledneck_03]

i am 23 and just bought my first house. its brand new and i framed for a bit and its done fairly good, there is alot of attention to detail and im fairly impressed.

now as for used houses you dont know what you are going to buy, a friend of mine is re doing his house and he cant believe the sloppy work that was done to build it, and you would never know until you ripp into it.

i went with a mortgage company, and made sure they knew i wanted i big bank not some ch!t one even if they had a bit higher interest rate, i got like 3.99% for 5 years or so.... if they paid their taxes in full you have to pay from move in to the end of the term they paid to basically re reimburse them. once everything is good you need to get house insurance before you go to the lawyer or you can fax it afterward. Basically my relator's had a lawyer and a mortgage specialist and i went with all of them and they all worked together well and i got a couple dinner gift cards from them. also with a mortgage company they might have a insurer in house as well which they did were i went and i checked around too but they were the cheapest.

i completely forgot about my taxes this month, but i phoned the city and i just have to pay this months monthly payment and then i can set up for Tipps, best thing to do if they are paying Tipps you might want to look add your taxes to your mortgage.

But its great owning your own home...... we own a condo too and rent it but im getting sick of owning it, its older and they keep doing renovations and ill get notices for door and window upgrades and you now ow us this much or you need to replace your self by this date, they just upgraded the boilers and h vacs and that was another couple thousand..........hate old ch!t.

with mortgage and bills our place is like $2000 a month as well as $3200 tax a year.....house is 1400sqft per lever and was around $300,000 in martensville, same house in saskatoon would be $400,000.

my dad use to sell relistate and he was great for putting pressure and doing the deal but hes old school and times have changed and i basically looked online on saturday, drove around sunday, went looking with the relater monday, put a offer tuesday, re offered wednesday and got the deal wednesday..........3 weeks later my friend bought and almost all the houses we looked at sold, went from 8 houses to 2 in that price range so good thing we acted fast.

check the yard and ask the neighbors and so on, the one side of my yard was really wet and i couldnt figure it out so one day i was vacuuming my truck and the neighbors sump pump was pumping on my yard so i asked him to move his hose and told him its probably pumping up then sinking down and re pumping the same water over and over so he moved it and it comes on less now. i then had to dig a trench in the dirt to dry the area out and when i landscape ill put weaping tile or whatever in the trench. a couple people i work with sold me on here because my work is 7 minutes away double lane highway not 15 threw the city. i can drive my sled threw town to go ride and not trailer, there is relatively no crime and its nice and quiet.

 

[tbosch]

First advice I can offer is to use a mortgage broker. I bought my first house at 19 and my bank laughed at me when I told them what I wanted to do. I went to a broker and was easily approved, and locked in to a mortgage rate 1.4% less than what the bank was offering at the time. There was also a program through CMHC at the time where you could use your RRSP's as a down payment and pay them back over a matter of 10 or 15 years I believe. Some people say this is a bad idea but it worked well for me, I had close to 30k in rrsps to put in to the house which decrease my mortgage enough to contribute extra to my rrsps's regularly. I dont know if this is an option for you or not.

When you do find the house you want, make sure to use a qualified inspector. IMO a person with a single trade wont do unless they have many years of experience in residential construction. You need someone with knowledge of plumbing, electrical, structural etc. If you are looking at an older house you will want to make sure you have your inspector check the foundation and inside the basement for moisture to ensure there hasnt been flood damage, or going to be flood damage soon. Also if your looking at an acreage have the inspector check the main electrical service to ensure it is large enough for expansion, you always end up needing more receptacles, lights, shops, sheds, quansits etc. If its an older house make sure to inspect windows, windows are expensive to replace. INspect the attic to see if there is sufficient insulation. Have the inspector look over the furnace and water heater thoroughly, and run the appliances if they are included. Nothing worse than going to run your first load of dishes and the dishwasher doesnt work.

Make sure to keep in mind during the whole process that its your money being spent(and lots of it) and you will only accept the best, when you think the house youre looking at is the only one you'll ever find generally theres probably a few more like it out there. Make your realtor work for his money.

 

[ZRrrr]

First advice I can offer is to use a mortgage broker. I bought my first house at 19 and my bank laughed at me when I told them what I wanted to do. I went to a broker and was easily approved, and locked in to a mortgage rate 1.4% less than what the bank was offering at the time. There was also a program through CMHC at the time where you could use your RRSP's as a down payment and pay them back over a matter of 10 or 15 years I believe. Some people say this is a bad idea but it worked well for me, I had close to 30k in rrsps to put in to the house which decrease my mortgage enough to contribute extra to my rrsps's regularly. I dont know if this is an option for you or not.

When you do find the house you want, make sure to use a qualified inspector. IMO a person with a single trade wont do unless they have many years of experience in residential construction. You need someone with knowledge of plumbing, electrical, structural etc. If you are looking at an older house you will want to make sure you have your inspector check the foundation and inside the basement for moisture to ensure there hasnt been flood damage, or going to be flood damage soon. Also if your looking at an acreage have the inspector check the main electrical service to ensure it is large enough for expansion, you always end up needing more receptacles, lights, shops, sheds, quansits etc. If its an older house make sure to inspect windows, windows are expensive to replace. INspect the attic to see if there is sufficient insulation. Have the inspector look over the furnace and water heater thoroughly, and run the appliances if they are included. Nothing worse than going to run your first load of dishes and the dishwasher doesnt work.

Make sure to keep in mind during the whole process that its your money being spent(and lots of it) and you will only accept the best, when you think the house youre looking at is the only one you'll ever find generally theres probably a few more like it out there. Make your realtor work for his money.

This is exaclty what I was going to say!

Use a broker, stay away from the banks...they are NOT your friend and love to take first time buyers for a ride.
Use your RRSP for the down payment. It's a fantastic program for first time buyers and if you don't use it, that option is gone forever. It will save you money in the long run as stated above.
I used an inspector that was a structural engineer who spent almost an entire day at the house and wrote up this huge report. My insurance company loved that report (it was all good) and I think it saved me a few bucks as it gave them peace of mind.
Good luck and enjoy. Nothing better than having your own place where you can crank the stereo as loud as you want!!!

 

[DRD]

Don't overbuy. Interest rates won't/can't stay this way forever. I'd assume 5-6% interest and base my comfortable payment on that high rate.

 

[enis750]

First advice I can offer is to use a mortgage broker. I bought my first house at 19 and my bank laughed at me when I told them what I wanted to do. I went to a broker and was easily approved, and locked in to a mortgage rate 1.4% less than what the bank was offering at the time. There was also a program through CMHC at the time where you could use your RRSP's as a down payment and pay them back over a matter of 10 or 15 years I believe. Some people say this is a bad idea but it worked well for me, I had close to 30k in rrsps to put in to the house which decrease my mortgage enough to contribute extra to my rrsps's regularly. I dont know if this is an option for you or not.

When you do find the house you want, make sure to use a qualified inspector. IMO a person with a single trade wont do unless they have many years of experience in residential construction. You need someone with knowledge of plumbing, electrical, structural etc. If you are looking at an older house you will want to make sure you have your inspector check the foundation and inside the basement for moisture to ensure there hasnt been flood damage, or going to be flood damage soon. Also if your looking at an acreage have the inspector check the main electrical service to ensure it is large enough for expansion, you always end up needing more receptacles, lights, shops, sheds, quansits etc. If its an older house make sure to inspect windows, windows are expensive to replace. INspect the attic to see if there is sufficient insulation. Have the inspector look over the furnace and water heater thoroughly, and run the appliances if they are included. Nothing worse than going to run your first load of dishes and the dishwasher doesnt work.

Make sure to keep in mind during the whole process that its your money being spent(and lots of it) and you will only accept the best, when you think the house youre looking at is the only one you'll ever find generally theres probably a few more like it out there. Make your realtor work for his money.

This is exaclty what I was going to say!

Use a broker, stay away from the banks...they are NOT your friend and love to take first time buyers for a ride.
Use your RRSP for the down payment. It's a fantastic program for first time buyers and if you don't use it, that option is gone forever. It will save you money in the long run as stated above.
I used an inspector that was a structural engineer who spent almost an entire day at the house and wrote up this huge report. My insurance company loved that report (it was all good) and I think it saved me a few bucks as it gave them peace of mind.
Good luck and enjoy. Nothing better than having your own place where you can crank the stereo as loud as you want!!!

i LOVE clients like you!!! obviously educated and experienced in this subject - GOOD ON YOU (must have had a good broker)
but its true...BANKS STEAL YOUR MONEY....plain and simple

check this out
Mortgage Brokers on average will save you over .75% on a fixed rate product, compared to your "bank"

Heres a quick exmaple for you:

$250,000 Mortgage, 5 year term, 25 year ammort. (life of MTG)
Banks rate is 4.54% (based on a .75% difference)

Monthly Payment - $1389.25
Interest paid in 5 years - $52,990.83

Now MY Rate (currently) @ 3.79%

Monthly Payment- $1286.75
Interest paid in 5 years - $44,036.44

Your interest savings - $8,954.39
Your payment savings (over 5 years) - $6,150
Total savings - $15,104.39!!!
YES, over $15k, for only .75% difference

the thing that bugs the crap out of me is this

Banker-"Oh Mr. X, I can give you 4.50% on your Mortgage if you sign w me!"
You-"But Mr. Banker, my broker can do 3.79%, why can't you?"
Banker- "Oh he can do that?? ok, I will match it for you!!! IF, IF you open a chqing, savings and your Visa!!?? How does that sound?"

The problem i Have .....WHY DIDNT YOU OFFER THE RATE UP FRONT FIRST????

this is how banks STEAL YOUR MONEY...and nothing drives me more crazy than this
banks rates are based on sales targets and meeting quotas - they dont care about what's important to you
i worked for a major corporation for years - I had to get out
and opening up more accounts with you and the PITA to move everything..NO THANKS
you always get the BEST rate up FRONT from a broker

anyways.....

YES a BROKER is 100% the way to go

2 years ago, Brokers had only 27% of the industry locked up
Today the number is over 42%

The lenders pay us, so you dont have to
I have actual bank employees on the books with me (managers included), because I get better rates than the staff discount that they get

Why you ask?

Because Brokers write 5 times the business bankers do (on average), so we are compensated w better rates
The average Banker will write about 2 million/year
I wrote over 20 million last year....just sayin

Anyways....dude..if you need help in getting started, PM or email me
I can point you in the right direction
I am located in Saskatoon, but can write business all over Canada

heres my website:

whether you use ME or not, USE A BROKER...you won't be dissapointed

 

[Work2Ride]

Ask around about a good Realtor.

If one more mortgage broker can't make it work, try another, some are more willing to go that extra mile to make it happen.

Home Inspector - They generally catch anything wrong, but they do make mistakes and may miss something.

Use a Real Estate Lawyer, not just a Lawyer that has no to little experience in Real Estate Transactions. Go over with her/him the closing costs, as they do add up quickly.

I don't know how big your down payment is, but maybe consider not using all of it. If you have $40,000 down, put down $20,000. Potentially use the other $20,000 to invest in another house to rent out. People move in and start paying your mortgage payments(note: Rental properties with garages tend to be more appealing).

Good for you for having your poop in a group at 21.

 

[mach123]

I can only say that you can save a ton of money just by paying weekly or bi-weekly and it ends up being the same amount as a monthly payment. Ours knocked off about 9 yrs off our term....Good luck....

 

[enis750]

I can only say that you can save a ton of money just by paying weekly or bi-weekly and it ends up being the same amount as a monthly payment. Ours knocked off about 9 yrs off our amoritzation....Good luck....

thanks for the reply mach (I didnt want to get too long winded in my post)
by I will add to your response as its only partially correct
and i also corrected your terminology above

explaination of different payment options:

paying your Mortgage weekly or bi-wkly offers the same befefit - just the frequency is different
just like paying monthly and semi-monthly are the same thing
now by same thing, I mean it pays the principle down at the same rate

heres why:

when we calculate you monthly paymnt obviously it calculated by 12 months
when we calculate a bi-wkly pymnt, it is based over 52 weeks in the year

Example: (I will use a $250,000 mtg @ 3.79% & a 25 yr amm. again)

Here are you different payment amounts and options:

Monthly-$1286.75
Semi-monthly-$643.37
Weekly-$296.94
Bi-weekly-$593.88
Accelerated Bi-wkly-$643.37
Accelerated-weekly-$321.69

whats the main difference?

a weekly and bi-weekly payment offer a slightly smaller payment every two weeks, compared to semi-monthly - by $49.49
because they are calcualted over 52 weeks, not a 12 month period

accelerated bi-wkly and accelerated weekly, just take the monthly pymnt and divide it in half (look above, the pymnts are the same)
BUT - when paying w one of the weekly or bi-wkly options, you have 4-5 months in the year, that you will make 3 half Mortgage payments
this year, that happens to be Jan., April, July, October & December (depending on how your paymnt schedule is set up)

so paying your Mortgage bi-wkly or weekly does in fact take more time off the life of your Mortgage >>>>>
paying it accelerated bi-wkly OR accelerated weekly, takes even more time off


heres another example: (same amounts as above, $250k MTG and 25 yr amm.)
After your 5 year term is up, you will have the remaining years left

Monthly-20 years
Semi-Monthly-same as monthly
Bi-wkly-20 years (but you will see less after you renew)
Weekly-same as bi-wkly
Accel. Bi-wkly-17 years
Accel. Weekly-17 years

now this will also change, based on a 30 or 35 year amm. as well

there are a TONNE of different options out there, so I always try to ask my clients what payment option would work BEST for their current situation
most first time homebuyrs will choose a 35 year amm., because it offers a substantial payment break (which they could all use)

On the other hand, I try to encourage them to go on an accelerated bi-wkly or accelerated weekly payment plan, to ensure that the principal is paid down enough in 5 years - this gains them more equity over time

simple rule of thumb - the longer the amm., the more money that goes to interest
but it can be manipulated by changing the payment frequency

there ya go!

enis750's Mortgage tip of the day

sorry for the long winded post again!! hahah!

 

[Luke The Drifter]

Thanks for all the advice and guidance guys! This is something that I've been brewing in my head for a little while. It isn't gonna happen overnight but I wanna have my ducks in a row when the time comes. How much is an acceptable down payment, percentage wise? I'm thinking sometime in the fall if things go right and according to plan.

Any realty site to view properties in Alberta? I've been to a few of them and they seem kind of vague? Maybe I'm not looking hard enough?

 

[bigdaddy35]

Here's what I've learned:

1. Take your time. Rushing can lead to bad decisions
2. Talk to your lender and find out what you can afford.
3. Find the areas you want to live in and identify things in a house you can't live without (garage, walk-out, number of bedrooms etc)
4. Find a realtor and let them know 1-3. (Make sure the realtor is familiar with all types of sales - forclosures etc as some don't know all the rules and it can cost you).
5. Look at many properties
6. get a lawyer specializing in realestate law. Find your own, don't just take the one your realtor refers you to.
7. Get a home inspector to go through the property. Go with them and be there when they do the inspection. Again, find your own, not the one your realtor referred you to.
8. When you make the offer and the games begin, don't flinch and stick to your plan. Don't get emotional. There are more sellers than buyers right now.
9. Expect an additional 1-4% for closing costs (inspector fees, lawyer fees, etc. The sellor pays the realtors)

 

[Bogger]

check the comfree and for sale by owner listings as well, sometimes they ask less given that the sales fees are lower.

I sold my house in lamont private sale for 139K had I gone through a realtor I would not have accepted less than 150K.

 

[Ryano]

that is one expensive hose bog

 

[Bogger]

that is one expensive hose bog

It was insulated....:d

 

[enis750]

Here's what I've learned:

1. Take your time. Rushing can lead to bad decisions

2. Talk to your lender and find out what you can afford.

3. Find the areas you want to live in and identify things in a house you can't live without (garage, walk-out, number of bedrooms etc)

4. Find a realtor and let them know 1-3. (Make sure the realtor is familiar with all types of sales - forclosures etc as some don't know all the rules and it can cost you).

5. Look at many properties

6. get a lawyer specializing in realestate law. Find your own, don't just take the one your realtor refers you to. - it's not a bad idea to take your Realtors OR Brokers reccomendation for a lawyer. For example, my lawer gives my clients a break on their legal fees, instead of a referral fee to me. This saves my clients money in the long run. If you just start calling around, you will get bent over...big time. OR, take a reccomendation from a family member as well, someone trusted. Most Realtors will only deal w Real Estate lawyers and not dual practice solicitors (mine is anyways).

7. Get a home inspector to go through the property. Go with them and be there when they do the inspection. Again, find your own, not the one your realtor referred you to. -going to disagree with you again. Its soo much easier when you can use the referrals of you Realtor or Broker. Its cheaper for you this way and your using someone who is trusted by your Realtor or Broker. YES everybody wants the sale to go through and everyone wants to make a commission, but ur not going to get screwed this way. Realtors, inspectors and Brokers all have job specific licences. They are not willing to lose them, over something stupid (at least me and my industry partners are not.)

The last thing you want to do, is worry about finding a home inspector, lawyer, etc.. pricing out each one, then choosing one based on their portfolio etc. You only have about 5-7 business days from when you write the offer to remove all these conditions. Time is limited.

But yes, BE THERE for the home inspection. It gives you another chance to look at the home and know the ins and outs. Remember, you can walk away from ANY offer, for any reason, when you write the offer w the conditions of financing and home inspection. Even if you change your mind for whatever reason, you can still walk away WITH your deposit.

8. When you make the offer and the games begin, don't flinch and stick to your plan. Don't get emotional. There are more sellers than buyers right now.

Good advice in todays market

9. Expect an additional 1-4% for closing costs (inspector fees, lawyer fees, etc. The sellor pays the realtors)

- yes, its close to this. Lenders will ask you to prove 1.5% for closing costs. (as mentioned above, the lawyers fees, inspector fees, title insurance (if no surveyors cretificate is available), and property taxes.) But it will not cost you any where near 1.5% for legal costs. Most lawyers will charge between $700-950 for actual legal fees and then .001% of the total purchase amount to register w land titles. Then you misc. photocopying charges and so on.

One additional thing to keep in mind.
Property taxes - if the seller has paid the property taxes for the year, you have to remburss them for your portion of the year, at closing (your possession date)

Example - you move in on June 1, the seller paid $2000 for property taxes for the whole year. You have to pay them back, $1000 because you are living there for 1/2 the year. If they have not paid them in full (they paid them monthly) you are only responsible for the taxes for the amount of time that take possession. So in this case, you are only responsible for $1000 not the full $2000. Then next year, you have to pay the full $2000 again. Make sense?

But what bigdaddy was getting at - have some extra cash around to be able to pay for these things so your not strapped.

Im gonna chime in again here, see above in BOLD