Tips for a first time home buyer

[Newview01]

Originally Posted by fishtank

That depend on your down payment and mortgage and the cost of repair and maintenance and property taxe$$$$ etc...) vs rent amount

When you rent, you are not gaining equity. When you are paying into a mortgage, you are.

Does anyone know where rent is less than what the mortgage is worth? Last time I checked landlords aren't interested in charging less rent than what they are paying on the mortgage / property tax.

[HyperMOA]

Originally Posted by 223MB

Lots of talks on RRSP’s for the down payment. I currently don’t have RRSP’s as I use have a good pension. most of our down payment is in TFSA’s.

If this is your only option for a down-payment; so be it. I would go and speak with an investor however, and see if there are some other options. My opinion (and its only an opinion) is that you should use that TFSA money as a last resort. My opinion is that the TFSA is the best tool to save for retirement. Every dollar you make in your TFSA the government gets nothing. There is nowhere else you can make money tax-free. Everyone 18 years old or older should be maxing out their TFSA, and leaving it to grow.

If you have to use your TFSA, maybe buy RRSP's with the TFSA. Use the RRSP's to purchase the house. Use the tax deduction from the RRSP's to reinvest into your TFSA. That is one quick idea. An investor would likely have better ideas.

[AndrewM]

Originally Posted by Newview01

When you rent, you are not gaining equity. When you are paying into a mortgage, you are.

Does anyone know where rent is less than what the mortgage is worth? Last time I checked landlords aren't interested in charging less rent than what they are paying on the mortgage / property tax.

If you need to spend $10,000 on CMHC, housing prices are dropping, and you plan on moving in a few years, it absolutely makes sense to rent.

[Capt. awesome]

Originally Posted by sns2

1) Don't take out the maximum mortgage you can. Life will happen. Rainy days will come. Things will break down. You want to be able to have a few bucks to live.

2) Get an inspection unless it is brand new.

Best of luck!

I have to disagree with the second point. I bought brand new and still had an inspection done. Found a few things wrong with the house and made sure it was fixed before signing. While its nice to get a new house its always good to make sure its up to par before saying yes.

Originally Posted by Prairiewolf

First off, congratulations. Being a homeowner is awesome but buying a house was the most stressful thing I've ever done. Things I wish I'd listened to more include:

*Try to stick to your budget, but understand that what is truly expensive is buying alot of homes. If you find one you really love (more on that below) get it, you'll end up buying it at some point.

*Understand what you are and are not buying. A brand new house always looks shinier, but fences, decks, and landscaping add up quick.

*Make an inspection a condition, even if its new. You'd be surprised.

*Don't sign on for just the lowest rates you can with mortgage broker, understand the fine print like double up payments, lump sums etc. Those make a difference sometimes.

*Don't rush - they're making and selling these every day.

I never had a any of those things and I have to agree that they do add up. Could of had a deck added on to the house but it was only going to be a 10x10 and I wanted a deck I could relax on not just something to barely big enough for a table and bbq. Some builders will leave the landscaping up to you and give you a rebate once its complete.

[Suzukisam]

Make sure place to park quad. And a place to hang your deer and moose which is the #1 thing on your list to look for. After all this is a hunting forum so you must hunt

[Newview01]

Originally Posted by AndrewM

If you need to spend $10,000 on CMHC, housing prices are dropping, and you plan on moving in a few years, it absolutely makes sense to rent.

Are housing prices dropping? What is the 5-10 year forecast?

I wouldn't hesitate to buy even with paying CMHC and knowing I have to move in 3 years.

You are paying:
$55k ish to rent and have nothing
$50k ish to own (including CMHC fee) and if you sell you will walk away with money in your pocket (unless there is a serious market crash in AB, unlikely)

You will also walk away with stronger credit, you can develop a history with a bank, the benefits are huge.

Renting is good if you are a drifter, or if you are saving for a down-payment.

[kingrat]

Use the first time home buyers program, go accelerated by weekly payments on mortgage and don't forget about extra costs like insurance, lawyer fees etc. What I did was bought 10000 in rrsp then used my tax rebate I got back plus the 10000 in rrsp as my down payment.

[wildwoods]

Please don't use hearsay on an Internet forum to help you make decisions. Go look at the stats yourself. Average housing prices are up, although marginally in Edmonton over the last year as well as sales numbers.
I find it comical people who champion renting over owning. As long as you keep a good debt ratio you will never lose in a market like Edmonton. Even the disaster of 2008 has seen recovery of prices to those levels and beyond. Yes that's nine years ago but again, holding long-term you haven't lost. And that was an outrageous market with a crazy spike that people were buying at the top of the peak.
Is home ownership the best investment out there? Absolutely not. However it is a tangible asset that once paid for, you own and nobody can take it away. There are plenty of opportunities to buy well in this market.
Real estate is part of anyone's good, diverse portfolio. If you bought in 2004 and sold in 2007, chances are your investment made more money per hour than you did. And I'm not talking about principal residence. It's my firm belief that you don't make money in real estate until you own secondary and or multiple pieces.
My renters are currently earning me money three different ways: Monthly payment, market appreciation, and paying off my mortgage. You need a place to live so why on earth would you rent when you can own an appreciating asset?
And live below your means. I like that suggestion from previous posters. Always plan for a rainy day. Try to pay your mortgage off as quickly as you can with higher principal payments per month if you could afford it. My $.02. Happy home owning

[Big Grey Wolf]

I would not count on houses getting cheaper in Alberta with $64 West Texas and $70 Brent crude (Real World Oil Price). Homes in Alberta follow the price of oil.

[coastalhunter]

Go low. It's a headache free life. Off the top of
My head; I was approved for around 600k, purchased for 220k, put 25% down since its agricultural, financed 165k.

Wife works a 'till retirement' position with local ems, sure nice knowing with only one income everything is paid for. (I'm self employed & oilpatch so you never know)

[ryeguy21]

the smaller the town the harder it is to sell afterwards. Just something to keep in mind for when life gets in the way.

[leeelmer]

Buying vrs renting.
Buying you have options, you can change and do things as you would like.
But have to sell if you change jobs and want to move.
All break downs and maintence is on your dime.
If you do the math, and don't care about moving a wall or do this or that to the house, in the long term(20-30 years) it is cheeper to rent.
Yes I know you guys will tell me I am crazy but it is true.
20-30 years of house ownership has alot of costs.
New roof
new kitchen,
new appliences
new plumbing(some cases)
new flooring
new furnace
new hotwater
new septic
Cost of your loan over the course of time, this can add up to 10s of thousands of dollars.
Now you sell and it looks like you made a pile of cash? right?
Well sometimes, but if you add all the costs of repairs, costs of ownership, costs of lawyers, and real estate agents. Well did you make any profit?
That up to you to decide but in a lot of cases the answer is no.
Now would I ever rent? No because I like to do as I see fit and that is a lot of us. But don't get caught up in the I am making money on buying a house. Because in a lot of cases, this is pain not true. But there are alot of plus parts to owing your own home.;

[Sledin]

Guys will disagree.
But go with the variable rate mortgage, it saves you money. Historically it's always been the better option.
Banks aren't stupid and hate risk so look at the fixed rate, if you can make that payment go variable, even set your payment to that amount and pay down your mortgage faster.

Now let the naysayers say Nay!


Sent from my iPhone using Tapatalk

[Rastus]

The "ONLY" advice that I can give is "GET IT PAID FOR" because when you walk into a bank and claim that you own a $300,000.00 house and it is paid for! man those bankers will kiss your a__, well, you know what I mean. Not only that, you will save money on the interest, but it is up to you. If you invest the money and live off the interest, come retirement time you will have a whatever mortagae or rent on a home that you do not own. And remember if the interest rates go down or up your investments go down or up. But it is your call. You cain't live on, well what if.

[Newview01]

Originally Posted by leeelmer

Buying vrs renting.
Buying you have options, you can change and do things as you would like.
But have to sell if you change jobs and want to move.
All break downs and maintence is on your dime.
If you do the math, and don't care about moving a wall or do this or that to the house, in the long term(20-30 years) it is cheeper to rent.
Yes I know you guys will tell me I am crazy but it is true.
20-30 years of house ownership has alot of costs.
New roof
new kitchen,
new appliences
new plumbing(some cases)
new flooring
new furnace
new hotwater
new septic
Cost of your loan over the course of time, this can add up to 10s of thousands of dollars.
Now you sell and it looks like you made a pile of cash? right?
Well sometimes, but if you add all the costs of repairs, costs of ownership, costs of lawyers, and real estate agents. Well did you make any profit?
That up to you to decide but in a lot of cases the answer is no.
Now would I ever rent? No because I like to do as I see fit and that is a lot of us. But don't get caught up in the I am making money on buying a house. Because in a lot of cases, this is pain not true. But there are alot of plus parts to owing your own home.;

You are wrong. You will have a house to sell in 30 years if you own. You will have nothing in 30 years if you rent. As said before, rent is more $ than a mortgage payment.

[wildwoods]

Originally Posted by leeelmer

Buying vrs renting.
Buying you have options, you can change and do things as you would like.
But have to sell if you change jobs and want to move.
All break downs and maintence is on your dime.
If you do the math, and don't care about moving a wall or do this or that to the house, in the long term(20-30 years) it is cheeper to rent.
Yes I know you guys will tell me I am crazy but it is true.
20-30 years of house ownership has alot of costs.
New roof
new kitchen,
new appliences
new plumbing(some cases)
new flooring
new furnace
new hotwater
new septic
Cost of your loan over the course of time, this can add up to 10s of thousands of dollars.
Now you sell and it looks like you made a pile of cash? right?
Well sometimes, but if you add all the costs of repairs, costs of ownership, costs of lawyers, and real estate agents. Well did you make any profit?
That up to you to decide but in a lot of cases the answer is no.
Now would I ever rent? No because I like to do as I see fit and that is a lot of us. But don't get caught up in the I am making money on buying a house. Because in a lot of cases, this is pain not true. But there are alot of plus parts to owing your own home.;

The last 50+ years the house prices have doubled on average every nine years. If you held for 30 years that would mean you over triple. There's no way you put that much into your home in repairs. If you do, you have beyond a lemon of a house.
There is also no way it's cheaper to rent over 30 years. Rent is an endless pit with zero return. Again buying is not the best investment in the world. There's many that will pay more ROI. However: This is your castle! when home base is paid for and you never have to worry about losing it. If you don't buy beyond your means that is. And when you are dead and gone your kids will reap the benefits of you making good choices by inheriting a valuable asset.
Renting is always more expensive than buying except for a small small percentage of cases.

[Ken07AOVette]

After 17 years for me...
New roof - shingles only will do in 2018
new kitchen- nope
new appliances - went to gas, fridge is 5
new plumbing-nope
new flooring-nope
new furnace-yes went higher eff and a/c
new hotwater- yes at 12 years
new septic-nope on city

[leeelmer]

Originally Posted by Ken07AOVette

After 17 years for me...
New roof - shingles only will do in 2018
new kitchen- nope
new appliances - went to gas, fridge is 5
new plumbing-nope
new flooring-nope
new furnace-yes went higher eff and a/c
new hotwater- yes at 12 years
new septic-nope on city

And this is quite true Ken,
But sometimes it is true, and a guy has to be prepared for it is all I am saying,
Costs of home ownership needs to be factored into the equation.
And sometimes people don't look at this as a cost.

[fishtank]

Originally Posted by Newview01

When you rent, you are not gaining equity. When you are paying into a mortgage, you are.

Does anyone know where rent is less than what the mortgage is worth? Last time I checked landlords aren't interested in charging less rent than what they are paying on the mortgage / property tax.

sorry i have misunderstood ,i was thinking of some one buying a overprice house and taking on a huge mortgage, and paying a big mortgage payment every month. what i was thinking when i posted that buying a $500k house with $150k to drop on a house down payment and carry a $350k mortgage( also base on the assume low interest it would be a 25 year average 3-5%) and the fees that come with home ownership, i would have rent and invest the $150k with a return of 3-15% and i probably would be ahead down the road .
what coastalhunter post

Go low. It's a headache free life. Off the top of
My head; I was approved for around 600k, purchased for 220k, put 25% down since its agricultural, financed 165k.

Wife works a 'till retirement' position with local ems, sure nice knowing with only one income everything is paid for. (I'm self employed & oilpatch so you never know)

then absolutely owning is the way to go

[Trochu]

Generally, landlords aren't registered as a charity and losing money.

[Ken07AOVette]

Originally Posted by leeelmer

And this is quite true Ken,
But sometimes it is true, and a guy has to be prepared for it is all I am saying,
Costs of home ownership needs to be factored into the equation.
And sometimes people don't look at this as a cost.

There are other giant costs too.
If you have a high maintenance wife you might pay for a complete reno every few years.
I will pay roughly $50,000 in insurance in 20 years. It is a good thing that homes keep their value, or that would be a truly ugly number.
I have only ever had 1 claim, a few years ago when the town was backflushing the sewer. While my backwater valve stopped everyone else's burritos from coming into the basement, when my daughter drained the bathtub a bunch of ours were on the basement carpet.
That cost them just under $40,000.00. I was truly glad to have paid that year.

[223MB]

All this feedback is amazing guys, I appreciate it. Some very knowledgeable people on here.

[DiabeticKripple]

I’m going with the RRSP route for first time home buyers and using money that I have in company stocks and my TFSA.

[Big Grey Wolf]

Lets see, my first house cost $20,000 to buy, now worth $400,000. I guess it is better to rent and have a pile of receipts for your retirement years.

[AndrewM]

Most of the time it is better to buy than rent but not all the time. To generalize all areas the same and say buy would be a mistake.
My biggest piece of advice is don’t stretch yourself too thin. Buy what you can afford and you can always upgrade later.
Always be careful with girlfriends or future ex wife’s as you don’t want someone automatically getting half your house as matrimonial property when they didn’t contribute a penny.

[leeelmer]

Originally Posted by Big Grey Wolf

Lets see, my first house cost $20,000 to buy, now worth $400,000. I guess it is better to rent and have a pile of receipts for your retirement years.

Yes yes. But its not 1972 now its 2018
And houses cost 100s of thousands of dollars
Do you really think the average house in lets say Red Deer today is on the market for $372000.00 is going to be worth millions is 20 years?
No it certainly is not. Those days are gone. We are talking about buying a house now not years ago. Big difference

[MyAlberta]

Originally Posted by Newview01

When you rent, you are not gaining equity. When you are paying into a mortgage, you are.

Does anyone know where rent is less than what the mortgage is worth? Last time I checked landlords aren't interested in charging less rent than what they are paying on the mortgage / property tax.

Not sure about the rural market, but there are plenty in the urban market. A flood of ‘investors’ who jumped into rental are now scrambling to acquire tenancy to stop the bleed. Commercial is hurting even more.

[reddeerguy2015]

Originally Posted by AndrewM

Always be careful with girlfriends or future ex wife’s as you don’t want someone automatically getting half your house as matrimonial property when they didn’t contribute a penny.

Maybe the most solid piece of advice in this thread...

[MyAlberta]

Originally Posted by reddeerguy2015

maybe the most solid piece of advice in this thread...:sha_sarcasticlol:

mgtow

[hogie]

Originally Posted by leeelmer

Yes yes. But its not 1972 now its 2018
And houses cost 100s of thousands of dollars
Do you really think the average house in lets say Red Deer today is on the market for $372000.00 is going to be worth millions is 20 years?
No it certainly is not. Those days are gone. We are talking about buying a house now not years ago. Big difference

Maybe maybe not. Who would have believed a fully loaded truck could be pushing $100000 to purchase ? If you told somebody that 20 years ago they would have laughed at you. What is that truck worth 20 years from now?

I don't think (hope)we will see the crazy jumps in short periods like happened. I also don't think prices will change too much unless something major happens, if that happens won't matter if you rent or buy. The economy still isn't great and prices didn't drop in half, lost some but you would have that loss paying rent. People really don't like taking a loss unless they have to. When we sold in Camrose the appraiser had essentially the same house, he bought when everything has at it's peak, dropped about $30000 since he bought it a few years before. Not taking a loss and staying there .

My wife has moved many times for her job since 2002, we met in 2009. She was lucky that made money on every house. I made on my house that I had. We have done our last move as we are in an area where we want to be. We did take a loss on our last house due to the economy. Only there for 2.5 years and would have basically paid rent on it for what we lost. Had we stayed longer chances are would have broke even or made.