Organizing Your Finances

How do I begin to plan my financing?

House hunting begins at home… with planning. Before you look for a home, you need to know what you can afford. Knowing your price range will save you time and energy.

How much of a house you can afford depends on three things:

• How much you can afford for the monthly mortgage payment
• How much of the down payment you have available
• The amortization, or length of time required to pay off the loan, assuming interest rate does not change.

The Canada Mortgage and Housing Corporation has some good tools to help you figure things out. http://www.cmhc-schl.gc.ca/en/co/buho/buho_005.cfm

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First Time Buyers

Two out of three Canadian families own a house – that’s one of the highest rates of home ownership in the world. And for good reason.

Real estate is a great investment. Although the market can go up and down, in Toronto, it’s a fairly safe investment – especially if you’re planning on living in the same place for a number of years.

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Needs vs. Wants

A little effort at the beginning of your home search can pay off in the end. You may save time, money and you’ll likely be happier with your home when you approach the process with as much information as you can.

You want a home that meets the needs of your current lifestyle, but there are very few homebuyers who don’t have to make some sort of compromise. Factors such as house cost, neighbourhood, lot size and special features play a big role in your decision. Determining which features your new house absolutely must have, and which features you could live without, is your first step in the home buying process.

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Understanding Market Conditions

How supply and demand on the housing market impact your buying strategy

Think back to high school economics. Remember those lessons on the laws of supply and demand, and how you swore you’d never need to know that stuff in the real world? Well, if you’re looking to buy a house, it could come in handy.

The concept is a simple one, but it teaches a valuable lesson in how housing market conditions affect price, and how understanding the market can affect your buying strategy.

In a nutshell, when there are more homes for sale than there are potential buyers, house prices drop. When there are fewer houses on the market than there are buyers, house prices will climb. When the number of homes on the market is roughly equal to the number of buyers, it’s called a balanced market.

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Types of Ownership

As you start your house hunt and begin to look at listings, you’ll have to develop a new vocabulary. You’ll encounter words and acronyms like “chattel”, “estoppel” and “MLS”. And when it comes to types of home ownership, the words look a bit more familiar, but the meaning is not so clear.

In Canadian real estate there are three broad categories of home ownership. The words “freehold”, “co-operative” and “condominium” are the terms used to define an owner’s rights and responsibilities with regards to the dwelling.

The differences lie in the freedom the owner has to renovate and decorate the property as well as rules that restrict certain behaviours. They can also define who is responsible for the various maintenance tasks on the premises.

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