First Time BuyersAs a first time buyer, you’re likely to have many questions about selecting, financing and buying your first home. How do we start looking for a home? How much money will we require to purchase the home? How much will the mortgage payments be each month and can we afford it? How does the home buying process work and what can we expect along the way? These are just a few of the questions you’re bound to have at the beginning of your exciting journey to buying your very first home!
Gary Hooge can provide the answers to your questions and walk you through the entire process, from viewing potential homes to making an offer, to setting up mortgage financing. Although buying your first home can be overwhelming, you can be confident that Gary Hooge will be available to help you every step of the way. Gary can make buying your first home simple and straightforward, eliminating any confusion and doubt and allowing you the opportunity to enjoy your first home, worry-free.
Whether you have spent years saving and preparing to buy a home, or you still aren’t sure if it is something you can even dream of, the questions surrounding a first-time home purchase can feel endless.
Helpful HintsHere are some tips to help you with the process of becoming your own landlord:
Prequalify for a loan
Being prequalified for a loan determines how much house you can afford. It also allows you to move more swiftly when you find the right house, especially when you aren’t the only interested buyer.
Shop for mortgage rates and terms
A difference of even half a percentage point can make a huge difference in how much you pay over the life of a loan. For example, the difference in the monthly payment on a $100,000 mortgage at 4.5 percent vs. 5 percent is about $27 per month. Over 25 years, that’s $8,100.
Using a buyer's agent
A buyer's agent is legally responsible for representing the buyer’s interest in a real estate transaction.
Rate the houses you tour
After touring each home, write down what you liked and didn’t like. Develop a rating system which will help you narrow the field down to the house that’s the best for you.
Government ProgramsThere are several government programs for first-time buyers that you can use:
Through the B.C. HOME Partnership program, the Province is helping first-time home buyers by contributing to the amount they have already saved for a down payment with a loan that is interest-free and payment-free for the first five years.
Here is how it works:
The B.C. HOME Partnership program will meet the buyer’s contribution up to 5% of the home’s purchase price, to a maximum purchase price of $750,000. After five years, buyers can either repay their loan or enter into monthly payments at current interest rates. Loans through the program become due after 25 years – the same length as most mortgages.
Under this program CMHC insures mortgages for 95 per cent of purchase price. Eligible to anyone who has not owned a home as their principal residence, either jointly or separately, in the past five years. Where there is more than one buyer, only one person has to be a first-time buyer. New home must be used for principal residence. New home cannot exceed maximum purchase price limits as set by CMHC.
Property Transfer Tax Exemption for First-Time Buyers
The First Time Home Buyers' Program reduces or eliminates the amount of property transfer tax you pay when you purchase your first home. If you qualify for the program, you may be eligible for either a full or partial exemption from the tax. In February 2017, the BC government announced that the property transfer tax exemption threshold for the First-Time Homebuyer’s Program will be increased to $500,000 from $475,000.
Finding the Right HouseWhen you have found a home you are interested in buying, I will walk you through the process of drafting an offer to purchase. I will also communicate the offer to the seller or the seller’s real estate agent for you. Some properties are in demand and you will not be the only interested party making an offer and I will assist you in generating an offer that is reasonable and protects your interests using specified terms and conditions.
An offer can be drafted with or without conditions; an offer without conditions is known as a firm offer and one with conditions is known as a conditional offer. A conditional offer represents the party with the placement of certain conditions on the purchase. Some of these conditions could be “subject to financing approval”, “subject to the strata council allowing pets”, “subject to the buyer’s house selling”, “subject to an approved home inspection”, among many others.
The seller may accept your initial offer, reject your offer or present a counter-offer. The counter-offer may differ from your original offer in respect to price, conditions, the closing date or any other items. Offers can be countered back and forth between the parties until one of you accepts or rejects, ending the negotiations.
There are many components of an offer that you should be aware of and understand. I will answer your questions and explain the entire process to you so that you are comfortable with the steps involved.
Terms: An offer includes certain “terms”, which specify the total price offered and how the financing will be arranged, such as if you will arrange your own with a financial institution or mortgage broker or if you wish to take over the seller’s mortgage (assumability).
Inclusions and Exclusions: These are specifications within the offer that detail the items to be included or excluded from the purchase of the property. Typical inclusions are appliances, window coverings, fixtures and decorative pieces.
Deposit: A deposit is usually given from the buyer to the seller as a token of the buyer’s assurance and intention to buy the property involved. The deposit is applied against the purchase price of the home once the sale has closed. I can assist you in proposing a certain and appropriate amount for the deposit.
Conditions: Items that are usually put in place to protect a party’s interests upon selling or buying the property and refer to things that must occur or be in place before the sale closes.
Possession or Closing Date: This is usually the date that the legal ownership of the property transfers from the seller to the buyer and, unless otherwise noted, when the funds for the purchase are concluded.
Purchase Price: This is the amount that the buyer is offering to pay for the property. The price is usually dependent on market conditions and may differ from the seller’s current asking price.