Edmonton Real Estate Blog

Buying a home is probably one of the best things you would ever do in your lifetime. It’s fun but also a bit scary at the same time as there is more to it than just browsing the internet and viewing a couple of open houses over the weekend. Believe us, we know. We’ve been there. Speaking from experience, my fiancé and I just recently bought our condo. There’s a ton of things to consider when buying a home for the first time and here at Team Leading Edge, we always like to help people in need-people like you. We broke down to bite-sized pieces all the essential things that you need to consider. Read, absorb and digest the information as it may help guide you in taking the right path to home ownership.

1. HOME SIZE VS LOCATION: We couldn’t stress more the importance of being decisive on day 1. Before you start searching the internet for that dream home, determine first what’s more important to you, size or location?

   More often than not, you will be torn between choosing a house that has a higher selling price but is located near your favorite establishments and a house that has a lower selling price with bigger living space BUT is a bit farther out of your favorite hangout place.

   Making this choice early on in the buying process will provide you with peace of mind and help you avert “buyer’s remorse” once everything is done.

   

2. MORTGAGE QUALIFICATION: Knowing the amount of mortgage you are qualified for should be your next top priority. You may believe you are qualified to borrow $400k but the lender might determine that you’re only good for $300k. Recognizing your mortgage qualification would basically narrow down your choices of homes.

   Check out our article on how you could boost your mortgage chances.

   

3. DURATION OF HOME LOAN: Quite a number of first time homebuyers prefer 30-year home loans while others chose to stick with 15-year mortgages. 30-year home loans usually have higher interest rates than 15-year loans. The main reason behind the high interest rate is because it will take longer for the lender to recoup the money loaned to you. Since Alberta is one of the best performing regions in the country, you may see very competitive interest rates out in the market. Review each one out to find the best interest rate for you.

   

4. SPEAKING OF RATES-KNOW HOW RATE THE INVENTORY: Once you reach this stage in the process, you can be sure that you’re on the right track!

   Being prudent in the selection process would help you avoid an expensive mistake. Here’s how you could rate the inventory of the houses that you visit so you could make an informed decision at the end of the day.

• Begin with taking photos of the house numbers and facade so you could easily identify individual houses.
• Take a piece of paper with you or use your mobile device to write down notes about significant features of the house such as the floor plan, room design and colors.
• Remember to check out the neighbor’s house. Would there be any possibility that it would cause problem in the future? Is it blocking any view?
• Also take note of the neighborhood, is it conveniently located to any near establishments that might be crucial to you?
• Shortly after leaving the house, rate it between the scale of 1 to 10, 10 being the best.

  

5. STOP BEING FINICKY! Okay, I just had to put it in here. I’ve had quite a number of clients that had been too picky and ended up with not so good deals. Since most first time homebuyers have limited resources, it is best to be open for compromise. You may have to make some home repairs or put up with ugly decorations. The idea here is if it’s just some minor inconveniences that you could easily fix, take it.

   Ask yourself, how important is it for you to have your own home now? Or would you still continue to rent for x number of years? Stop being finicky.

Equipped with this essential knowledge, we are confident that you could and would make the right decisions. To get you started in finding your future home, Team Leading Edge provides high speed access to the finest MLS real estate listings in Edmonton. It is there that you could browse through all the available houses and condos for sale in real-time.

You may also call the team at 780-634-8151 anytime you would like to schedule a viewing of your next home.

How to identify your best long-term alternative

Have you ever wondered whether it makes more sense to pay off your mortgage or to contribute to a Registered Retirement Savings Plan? Perhaps you’re expecting to receive some extra money from an inheritance or an employment bonus, and you’re not sure which route to take.

The truth is, there is no easy answer. There are many variables that must be taken into account. Concentrating on paying down a mortgage may be the best route for one person, while focusing on an RRSP may benefit another.

Here are some factors to consider:

• Your age. When you’re young, it is wise to make your RRSP a priority. The sooner you get money into a sheltered retirement plan, the longer it will grow on a tax-deferred basis. But don’t overlook the need to build home equity. It can give you a head start on the expenses of moving to a larger home as your family grows.
• Your income. The more you earn, the higher the rate of tax you’ll pay. That means you must earn more in before-tax dollars to make mortgage payments. If you’re a high income earner you may want to quickly reduce this expensive debt.
• Investment returns. Pay attention to the rate of investment returns you could reasonably expect to earn when you contribute to your RRSP. Astute investors could be further ahead by investing their money than paying down the mortgage. The benefits of investing are magnified by an RRSP, with tax-deferred growth within the plan and tax deductions on contributions.
• Your mortgage rate. If your mortgage rate is higher than your expected investment return on your RRSP, then paying down your mortgage may be prudent – especially if you expect borrowing costs to rise in the future. But if your mortgage rate is low, it may make more sense to contribute to an RRSP.
• Are you behind on your RRSP? If you have made less than your maximum annual RRSP contribution in the past, a lump sum could allow you to catch up. You are allowed to make up for unused contribution room that you’ve accumulated from past years – which can also generate a significant tax refund.
• Your pension plan. Those with generous workplace pension plans that provide for a secure retirement may be able to concentrate on a mortgage without giving up financial security in retirement. Of course, you can focus on both your RRSP and mortgage. For example, contribute to your RRSP and then apply the tax refund it generates towards a prepayment on your mortgage.

Sincerely,

Douglas J. Bodtcher                               
Investors Group Financial Services Inc.
780-448-1988 ext. 284