I will be turning 25 this week, and I keep thinking about moving out on my own. One big thing that keeps getting stuck in my head is Mortgages, owning a home, and bills. I think I could afford something small to start out, but I'm not sure. That and I don't want to rent thats for sure. Does anyone know any links or dummies books to help me get more info on this.
I'm in the same position as you bud. I basically hit the real estate websites to get a little bit of info (remax, century 21, MLS.ca).
Although being an accountant, I sill have some fears about payments and whatnot regarding mortgages and insurance.
I'm definitely getting a new house this summer, which one will depend on what happens tomorrow.
I sat down with a mortgage broker from capital mortgages. She was awsome and really helped me out. She even found me some money I could use for my DP that I didnt even know about. I would suggest getting pre-approved with a mortgage broker 1st, then getting a buyers agent (all free, MB gets commision from bank, Buyers agent gets commisison from seller). Once your pre-approved, you have like 120 days (depending on the approval) to find a house in that price range.
I'm the same age as you, so yeah its about time you move. :P haha....joke!
Also check out the 1st time home buyers plan if you have RRSp and that kind of stuff...
http://www.cra-arc.gc.ca/E/pub/tg/rc4135/rc4135-e.html
Find Mortgage broker that can help you out.
Also, look up mortgages for dummies.
There is absolutely NOTHING to be afraid of. (If you do your research)
Isn't it insane how much the bank will give you for a house. Divide your preapproval by 2/3 and that is what you can afford.
But it won't be easy.
When I bought my first house I was in deep dudu
I had overspent on purchases for the house.
I had lived with mom and dad and partied like it was 1999 and spent that way, although i could afford it living rent free at home, but I kept it up after I moved out and that spelt trouble.
If your parents are willing to help, that would be a great push in the right direction. I was very fortunate that my parents gave me the financial push in the right direction.
I personally think you need the minimum 5% down plus another 10k to cover move in expenses and minimal furniture. For most, you need to have access to atleast 25k. You can use your RRSP as a first time home buyer, but for someone in your field who doesn't work for a huge company with a great retirement package, your going to have to rely on your own RRSP portfolio very heavily in the future. Touching that money now means it stops growing and sets you back 3 times as many years as your repayment schedule.
A house/condo is a great idea, but just because your life has significantly changed doesn't mean you have to go leaping into a house.
Start planning for it by saving and put yourself on a strict budget to gain 25k in the shortest peiod of time possible.
And keep in mind that you are unemployed.
s***.
I forgot about that.
Put at least 10k away first.
MANY MANY EXPENSES!
RBC does a complete home visitation on your schedule - after hours, weekends, yadda yadda. Walk into your local branch and ask the info desk about speaking with a Mobile Mortgage Specialist.
The most painless 20 minutes regarding buying a house, EVER. be truthful and honest, and it makes the whole thing easy.
Closing costs, home inspection, down payment, lawyers fees (normally considered part of closing costs, but EXPENSIVE)... lotta stuff to factor in.
Plus, there's deposits on utilities (although Union Gas waived my deposit of 250+ when I agreed to pre-auth payments and 1 yr. equal billing), moving charges on existing utilities (Bell, etc), moving costs outright (rent a truck? gas? how many trips? use a trailer?).
Lots o stuff to remember, but it's worth it. We went through Century 21, signed a COST-FREE buyer agency agreement. This means the agent is your intermediary for all correspondence outside of the legal paperwork - price negotiations, anything left with the house, special considerations... and right up to the time they arrange for the final inspection. You can negotiate on built-in appliances or stuff to be left (dishwasher, air conditioner) right down to the blinds. We did!
Nate's right about appliances... we saved up enough cash to buy our new stove / fridge outright, then scored a deal on 1 yr old washer/dryer a couple of months later. I'd recommend not buying anything on payments, even with "no interest" for 2-3 years. These things tend to get away from you, and then wehn it comes time to have paid down the whole amount (even tho most don't) you're suddenly slapped with 3 years of interest on top of the purchase price... and that's AFTER taxes.
Yeah....forgot about that to....meford is right, today, all you need is a minimum of 5% for downpayment on the mortgage.
But depending on what you can get your hands on....I got a washer, dryer, dishwasher, stove and fridge when I orginally moved to orleans 3 years ago....paid something like $600 for all of the stuff. Most of it was free, and the rest was bought used. Of course its nice to move into a house with new stuff, but unfortunately not everyone can afford that. Thats what I'll be using my RRSP for. All new appliances :) So if you need some applicances..hehehehehe
And if your parents will let you.....try and live off of them for free as long as you can. I wish my parents wouldnt charge me rent while I wait for this house to be built, I could have so much more $$$. :angry: :angry:
I got lucky. Pops canned the rent I was paying when I lived with him....but he wanted to see bank statements EVERY month to ensure I was saving the money.
One thing I have to mention that maybe even Flo doesn't know about. When you buy new you get involved with CMHC and their fradulant insurance scheme.
Its a complete waste of money IMO and if you don't realize it now Nate, they are going to charge you about $5k?? I think when you go to finalize your paperwork with your lawyer.
I swore I would never pay that again and now that I have bought a new house I made sure that I had well over 25% to avoid the CMHC costs.
meford4u,Feb 28 2006, 09:45 AM Wrote:One thing I have to mention that maybe even Flo doesn't know about. When you buy new you get involved with CMHC and their fradulant insurance scheme.
Its a complete waste of money IMO and if you don't realize it now Nate, they are going to charge you about $5k?? I think when you go to finalize your paperwork with your lawyer.
I swore I would never pay that again and now that I have bought a new house I made sure that I had well over 25% to avoid the CMHC costs.
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CHMC is a crock.
We worked so bloody hard so we didin't have to pay that crap...
It felt good to decline those bastards.
You're right about it being a waste of cash, but you've gotta pay to play, one way or the other.
25% on our purchase price alone is $31,250. We sure as hell didn't have that in the bank, and it's highly unlikely (but possible) that he has $48,250 (25% of advertised price, anyways). That's before any other fees.
We were actually advised by our lawyer that we could have skipped the CMHC insurance if we did pay 25% or more down... but then he also said he has never seen that before for first-time buyers... nor heard about it outside of lottery winners.
Of course, we bought the house in the same year that we paid for our wedding / honeymoon, so again... there's only so much in this life. :)
Yeah, its rolled into the mortgage. I didnt get dinged as hard becaue I'm around a 15% downpayment....no way I could get another 10% and be able to stay sane.
Looking forward to my closing costs. :ph34r:
hmmmm *looks at financial statements*....
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I think i can put 25% down. Maybe.
Two ways to look at it. 25% + a minium of $15K for closing costs, furniture etc.
or
5% and 15K for closing and furniture etc.
Simple as that.
^^Yup. We could have put more down, but chose not to so that we could actually live, survive, and buy christmas gifts :D
My main plan is to get 25%. I was also planning on using my RRSP. My retirement isn't on my mind right now. My plan originaly was to use the RRSP's I have save up. Right now I am some where around 15k. I know I can use up to 20k. As for the rest of my savings, I am putting a little away every week. Yeah not working right now sucks. But good in a way, where I can put some thought into my future. Yeah my wage is only going to give me about $40k a year gross. So that doesn't rellly give me alot to play with. Yeah I should have thought about thinking about this stuff alot earlier, but I'm dumb, so I just have to deal with it.
How much add expenses do I have to look forward to seeing, when the whole house thing comes up. My first house I don't think will be more than $120. But I'm not sure really what I can afford. Once I get the money I think I should be alright with, then I will go to the bank, and find out. I already have a bunch of stuff put away, for a house. So thats cool. I have some things that will fill the house/condo up with. I am still kinda new on what bills will be like. I have a car payment, insurance, celly, gym payment. And thats about it. I really think I need to be making more money, in order the be well off to be buying a house. I guess if I ddn't have a car to pay for right now it might be different. That really takes quite a bit out of my funds. If I could go back, I probably would have not bought a brand new car, and bought a used, or something, so then I can save more, and faaster.
Does anyone out there have a money tree, that I could borrow only for a bit, I will take very good car of it. I will watter it every day, and return it when I am done .............ANYBODY!!!!!
LOLOLOLOL
If you are at all handy and willing to wait for the right deal you can save a lot on a Fixer Upper or a Power of Sale. Assuming you're single or married without planning kids soon, you can get one that needs some updating; as long as you can live with living in a construction zone for a bit. Just make sure that you have someone knowledgable check put the house with you -- be careful of "home inspectors" especially ones "recommended" by realtors -- they know where the gravy train is and it's making the sale not protecting you.
Okay, in terms of buying a place, the last thing you want to be right now is "house rich/cash poor" IOW it's never a good idea to buy as much of a place as you can afford, better to shoot lower and have that extra room.
Whether you buy a house or a condo depends entirely on whether you want to have the full care and control (not to mention the responsibility) for all the bills you may never think of now (Heat, hydro, utils, water, property taxes) and the maintenance and upkeep of the property.
Closing costs is a nice gotcha to watch out for including a nice chunk for lawyers fees, I caught a break because it's a lawyer in the same building where I work and I've done him favours before, but it was still $500.
One other thing. Set aside an amount of money to buy yourself something nice for your new home. It doesn't have to be extravagant and can actually be something you need, but it helps to give you that sense of "home" seeing that item when you come back to your place.
NefCanuck