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Congratulations! You’ve decided to complete your own research before purchasing your new home. This article will offer you important information that helps you balance your budget while clarifying what your priorities for your new home will be. Follow the step by step instructions and enjoy the adventure of planning for your place!
1. Figure out your income and your liabilities. (We recommend you work through this step with your spouse or partner to make sure you’re both on the same page.)The following affordability rules help you stay within your budget so that your mortgage does not become overbearing once you’re a homeowner. The last thing you want is to buy a place, run out of money to support the mortgage, and move back in with your parents. This means you might start off with a different place than you imagined, but you can continue saving and build on your home with time. Over ambition when it comes to this initial buying stage is crucial to your success as a homeowner.
Two Important Affordability Rules
i. monthly housing costs < 32% of gross household monthly income
ii. entire monthly debt load < 40% of gross monthly income
2. Fitting in your needs and wants: This is the fun part you’ll want to invite your spouse/partner and/or children to participate. Hand out a sheet of paper for everyone to write on. Before you discuss the following items as a family, read out the items listed and have each person write down their own thoughts. Here’s the list we came up with, but feel free to adapt it to your preferences:
- Size requirements: Multiple bedrooms, bathrooms or a double garage?
- Special features: Air conditioning, fireplace, a swimming pool?
- Lifestyles and stages: Babies? Kids? Teens? Aging parents or in-laws?
- Location: Commuting costs? School zones? Convenience?
- Others: Any else you feel is important for the new place?
3. Now that you have a general idea of what the family wants, you want to make sure that you’re not just looking at your short term goals. People often just look at their budget and get a bit of tunnel vision thinking they can never afford a new home, for instance. But remember that you’re looking for a home that will serve you and your family for the next 5-10 years. A place that costs a bit more right now may be worth the investment.
a. New Homes in Vancouver
i. Up-to-date design that takes into account the latest trends, materials and features.
ii. Personalized choices. You may be able to upgrade or choose certain items such as siding, flooring, cabinets, plumbing and electrical fixtures.
iii. Up-to-date with the latest codes/standards. The latest building codes, electrical and energy-efficiency standards will be applied.
iv. Maintenance costs. Lower maintenance costs because everything is new and many items are covered by a warranty.
v. Builder warranty. Be sure to check all the conditions of the warranty.
vi. New Home Warranty programs. Know what program covers.
vii. Neighbourhood amenities such as schools, shopping malls and other services may not be complete for years.
viii. Taxes – you may qualify for a rebate of part of the GST or HST on homes that cost less than $450,000. Ask your realtor for details.
ix. Extra costs. You may have to pay extra for extras, e.g. a fireplace
b. Resale Homes in Vancouver
i. You can see what you are buying. Easy access to services. Probably established in a neighborhood with schools, shopping malls and other services.
ii. Landscaping is usually done and fencing installed. Previously owned homes may have extras like fireplaces or finished basements or swimming pools.
iii. No GST/HST. You don’t have to pay the GST/HST unless the house has been renovated substantially, and then the taxes are applied as if it were a new house.
iv. Possible redecorating and renovations. First see if it’s worth your investment.
c. Building Your Own Home in Vancouver
i. Pro: You get to make all decisions about size, design, location, etc.
ii. Con: You get to make all the decisions about size, design…etc.
(Depending on what type of person you are, building your own home may be more advantageous than not. Make sure you and your family agree whichever route you take.)
Stay tuned for the second part of this article coming your way… Good luck on your hunt for your new Vancouver Home!!!
