November 22, 2019

Taking the stress out of home buying

Darren Sharko
QMI Agency

The thought of buying a new home can be overwhelming.

Where do I start?

Who do I talk to?

What can I afford?

How do mortgage and interest rates work, and how can I get the most out of my money?

These are some of the more common questions first time homebuyers have, as they sometimes feel overloaded by the mere process of purchasing a new home.

But the secret to the successful search and purchase of a new home lays in one single word: research.

There are simply so many choices out there right now, it’s understandable that making these major life decisions can be an intimidating time.

But with mortgage rates only on the rise, now is the time to get in the many personal and financial advantages of owning a home.

It can be tough in the new home buying market today, and we want to help you through the process in any way possible.

You may not know where to start when it comes to researching our current market and deciding what works for your unique situation.

But you can bet we can lead you in the right direction.

Within these pages you’ll find help and information on topics that cover many aspects of buying your first home.

Interesting developments

There’s also been some interesting developments over the past little while on a local and national basis which will see both short-term and long term affects on our housing market.

For example, the Bank of Canada has raised its trendsetting interest rate to 4.25%.

The increase to the overnight rate – what major banks charge each other for overnight loans – is the seventh increase since last fall, when the Bank of Canada started edging rates up gently to slow down a red-hot economy and keep inflation in check.

This central bank’s overnight rate sets the pace for many consumer borrowing costs, including variable mortgage rates charged by the chartered banks, and means consumers should expect to see higher interest rates for such things as lines of credit and variable rate mortgages.

“With (this) increase, the target for the overnight rate is now at a level that is expected to keep the Canadian economy on the base-case path projected” said central bankers in a statement.

Meanwhile, Century 21 Canada has released a market survey which names Calgary-northeast and Fort McMurray as Alberta’s hot home buying spots.

Prices for homes in Calgary’s northeast have increased 121% and 105% in Fort McMurray.

Edmonton third on the list

Edmonton is third on the list, having seen an increase of 79% in the past five years, from $123,000 to $220,000.

Scotiabank also came out with an interesting report this past week which shows Canada’s multi-year boom in multi-unit construction is showing no sign of letting up, even as reduced affordability and rising land costs have begun to dampen construction of single-detached family homes.

“Ground was broken on more than 105,000 multi-unit dwellings last year, up slightly from 2004 and more than double the level of a decade earlier,” said Adrienne Warren, Senior Economist, Scotia Economics.

“Construction of single-detached homes, in contrast, fell seven per cent to 120,000 units.

“We expect these trends to continue in 2006, with multiple-unit starts holding steady and singles declining for a second consecutive year.”

According to the report, multiple-unit housing developments – apartments/condominiums, townhouses and semi-detached homes – are becoming an increasingly dominant fixture of Canada’s residential construction landscape.

They might know about homes that are on the market. Check the homes section in the newspaper as well as real estate websites, such as www.mls.ca, for information and photos on a wide range of properties.

You can also simply drive around a neighbourhood that interests you and look for “For Sale” signs.

Whatever method you choose to look for a house, do your research to learn as much as possible about the home that you want to buy.

It’s also important to research the people and organizations that are helping you buy your home, including your real estate agent, lender or mortgage broker, lawyer and home inspector.

Ask for their references and call the people who have done business with them before.

Also ask how they can help you with your special needs as a new Canadian. For instance, do they speak your first language?

Looking for a home requires patient, deliberate work and some thoughtful planning, but when you consider how much time you will be spending in your home, and how much money you spend to buy a home, the effort is clearly worth it.

CMHC also offers several worksheets and checklists to help with every stage of the home buying process. Simply visit www.cmhc.ca and type “home hunting” in the search box or visit Housing for Newcomers at www.cmhc.ca/newcomers.

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