2016 First time Home Buyer's Guide

first time

home buyer’s guide

2016 EDITION

a complete walkthrough of buying your first home, from combi ng the market to getting the keys!

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first time homebuyer’s guide Tips to get you started on your search BEGIN BY EXAMINING YOUR FINANCES AND FINDING A REALTOR

B

uying a home for the first time is an exciting period in a person's life.

Deciding to buy a home often indicates buyers are ready to establish firm roots in a community they can see themselves living for years to come.

The process of buying a home is rarely easy, and firsttime buyers may feel overwhelmed at times.

Such feelings are perfectly normal and felt by first-time buyers regardless of their budgets or home

A home is the biggest purchase many people will ever make. First-time buyers may be intimidated as they begin searching for their homes, but there are several ways to make the process go smoothly. preferences.

But there are a few ways to make buying a home more enjoyable than it is nervewracking.

• Examine your finances:

The first step toward buying a home has nothing to do with deciding if you prefer a craftsman- or Tudorstyle home.

Before you even begin your search

Mr. Carswell & Talena Jensen (KEVIN)

B.PE./Ed.

Your first stop for your first home!

Choose a neighbourhood When considering which neighbourhood to begin a home search, buyers can research a host of factors.

• Crime: Statistics are public domain, meaning buyers can examine crime figures for any neighbourhood where they are considering buying a home.

• Home values: Buyers can work with a local realtor to find a neighbourhood or area where real estate prices are trending for a home, carefully examine your finances to determine how much is coming in and how much is going out of your household

each month.

Figure out how much debt you are currently carrying, be it student loan, automotive, consumer or any other

322 Seymour St, Kamloops BC

types of debt. Order a credit report so you can see how prospective lenders are likely to see you, and address any errors you find on the

My best advice?

Save time and money by connecting with a mortgage professional.

Don’t waste time chasing after houses you cannot afford or begging your bank for better mortgage rates. Get it all done with me at Mortgage Intelligence. I’ll help you find the best rates and best mortgage options, so you can focus on finding your best home.

Come for a free, no-obligation First-Time Home Buying Seminar. Email, Facebook or call to set up your time.

FREE Mortgage Pre-approval* Cell:778-220-5432 Cell: 250.319.3821 Office: 250-374-3022 talenajensen@royallepage.ca mrcarswell@royallepage.ca

upwards. While buyers might be able to find a great deal on a home in a neighbourhood where home prices are dropping, it’s important to remember those home prices are dropping for a reason.

• Amenities: The proximity of amenities such as shopping, restaurants and parks is attractive to many buyers, and that’s something all buyers should consider before buying a home.

Steve Bucher

Mortgage Consultant 425 Tranquille Rd 250.682.6077 steve.bucher@migroup.ca *for anyone considering a home purchase in the next 12 months.

FRIDAY, April 29, 2016 FRIDAY, April 29, 2016

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first time homebuyer’s guide Homes in Sun Rivers KTW file photo

might be able to scale back if need be.

• Be prepared when visiting lenders: Prospective borrowers can make the

home-buying process go smoothly by having all of the necessary documentation ready when visiting potential lenders.

Many mortgage lenders will want to see some recent pay stubs, a couple years' worth of tax returns and your recent bank statements.

their dream homes as they scramble to secure financing after making an offer.

• Work with a local real estate agent.

Agents can help firsttime buyers navigate the often confusing and, at times, disappointing process of buying a home. Choose an agent who is established in the area where you want to buy a home.

He or she can provide information about local property taxes and schools as well as a multitude of additional issues that first-time buyers may not think of.

Agents also know the lay of the land regarding home prices, which can ease first-time buyers' fears about overpaying for their first homes.

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report before meeting with any lenders.

Peruse past bank statements to track your spending habits, looking for areas where you

You can always call ahead and ask lenders what they need to see when applying for a loan. Having these materials ready in advance means you will spend less time at the bank and more time finding the right home for you.

• Secure financing before you begin house hunting: Many firsttime home buyers might not realize the benefits of securing financing before they begin looking for a home.

Mortgage preapproval lets buyers know how much a bank will loan them, meaning they won't spend time looking at homes they can't afford. In addition, preapproval means buyers won't lose out on

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first time homebuyer’s guide Finding your home: Preparation is key CONSIDER ALL THE FACTORS THAT WILL IMPACT YOUR DECISION

H Certain Images Realtor Andrea Waymouth said first-time buyers often first weigh the pros and cons of owning a newly constructed home or an established home.

There are benefits to both.

ousing demand in the Kamloops area continues to be steady and interest in new home purchases by firsttime homebuyers is no exception.

Purchasing a new home can be an exciting experience for any homebuyer, but there is something special about that leap

to owning a first home that is memorable for most. And preparation is key.

Andrea Waymouth, a realtor at Juniper Realty and sales manager for Juniper West, has had her share of first-time home clients in her 10 years in the industry and notes there are many important factors that impact this big decision.

Prioritizing likes and dislikes related to home features, location and neighbourhood amenities are a few of the obvious ones and are essential to determine at the outset of a home search.

More complex considerations such as financing and the pros and cons of a newly constructed home purchase versus buying an established

M AG G I E S C H MA LT Z

REALTOR®

THOMPSON RIVERS APPRAISALS & Real Estate Consultants Inc.

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first time homebuyer’s guide

home are decisions that require further in-depth research and benefit from the help of experts.

“New buyers often ask about what’s better – owning a newly constructed home or purchasing an established home, and both have pros and cons that are usually decided based on personal circumstances,” Waymouth said.

“With newly constructed homes, there is more flexibility in home layout and design and structures are generally more modern, with open floor plans and prewiring for things like electronics, smoke and carbon-monoxide detectors.

“There are the benefits of warranties on the homes themselves, along with components within the homes ,such as materials and appliances.”

For older homes, Waymouth said those aspects are not necessarily in place, but when comparing new versus established in the same neighbourhood with the same amount of square footage, established homes may have more negotiating room on the purchase price.

Older homes may also have wellintegrated yards and gardens with more privacy and character.

New property transfer tax exemptions in B.C. translate to savings for buyers One of the most recent welcome changes to home purchasing is the provincial government’s decision on tax exemptions for newly constructed homes.

The change permits homebuyers who purchase newly constructed homes worth up to $750,000 to apply for a property transfer tax (PPT) exemption.

The new legislation was announced earlier this year as part of the government’s budget for 2016.

What that means for homebuyers looking for newly constructed homes is potentially thousands of dollars in savings on the cost of their purchase.

For example, on a fair market, newlyconstructed home worth $450,000, the one per cent PTT previously charged on the first $200,000 portion is now waived, while the two per cent remaining on the balance of the home’s value is also waived, which represents

$7,000 in overall savings.

Bev Wassen-Hunter, a mortgage specialist at BMO Bank of Montreal in Kamloops, said savings could be applied to other financial commitments related to home buying, such as the down payment, landscaping or home upgrade costs.

“For example, increasing your down payment with that $7,000 translates to about $2,500 in further savings on interest over the life of a 25-year mortgage when we consider the example of a new home worth $450,000,” she said.

The government says it made the changes in hopes of stimulating the new-home market and increasing the supply of housing in response to the demand that has driven house prices up.

To learn more about the exemption, visit the B.C. government website.

The PTT continues for used homes.

See Consult, page D6

YOUR SPECIALISTS IN

REAL ESTATE LAW Purchasing your first home is one of the most important purchases you will ever make and it can be daunting.

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Call Woitas McLeod & Associates, for a personal consultation.

Phone: 250-374-3337 Web: WoitasMcLeodLaw.ca 243 Seymour St, Kamloops

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first time homebuyer’s guide Consult experts to minimize unwanted surprises From page D5

Discussing these choices with a realtor and/ or financial expert to get a full scope of the pros and cons helps remove a lot of potential stress because there are fewer unexpected and unwanted surprises.

“We’ve had clients who appreciate things we’ve shared that are less obvious such as budgeting for additional costs such as window coverings, landscaping and fencing, which can add up quickly, or discussing building and landscape schemes that are integrated into master plans,” Waymouth said.

“Sometimes potential buyers don’t realize there are guidelines that must be followed.”

Waymouth said there are many easily accessible resources for first time homebuyers to begin their research, from reputable organizations such as the Canadian Housing and Mortgage Corporation, which has lots of information on its website, or through its mobile app Ready, Set, Home.

Certain Images Emerald Drive in Juniper West. Buyers should prioritize their location and neighbourhood preferences.

Terms and resources you’re a fir Whether new to Kam st time home buye r, loop call Kelly fos or just moving, r real estate all your needs

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PROGRAMS

• HomeBuyers’ Plan : The Home Buyers’ Plan is a one-time withdrawal up to $25,000 from a Registered Retirement Savings Plan (RRSP) by firsttime buyers to help purchase or build a home. Generally, you have to repay all withdrawals from your RRSP within 15 years. For more details, visit CRA’s website at cra-arc.gc.ca.

• CMHC Green Home program: When you use CMHC-insured financing to buy or build an energy-efficient home or make energy-saving renovations, you may qualify for a premium refund of 10 per cent on your mortgage default insurance and a premium refund for a longer amortization period (if applicable). Check out CMHC’s website for more information: cmhc.ca.

— Canadian Real Estate Association, crea.ca

TERMS

There are many terms you’ll hear real estate professionals use

during your home buying process.

While there are too many to list, these are a few you’ll surely hear at least once: • Amortization: The number of years it takes to repay the entire amount of a mortgage.

• Buyer Agency Agreement: Establishes a formal and exclusive relationship between the potential buyer and the broker and its representatives.

• Closing Date: The date on which the title and keys to the property are transferred from the seller to the buyer, and the money is paid. More information is available at wedothehomework.ca.

—newscanada.com

IMPORTANT LINKS:

• Kamloops and District Real Estate Association: kadrea. realtyserver.com • Canadian real estate listings: realtor.ca • Canadian Mortgage and Housing Corporation: cmhcschl.gc.ca • Canadian Real Estate Association: crea.ca

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first time homebuyer’s guide Budget for additional costs

W

hen you’re househunting, it’s easy to focus on the “big” numbers like asking price and offer price.

But before you sign the purchase agreement, you should take time to budget for the additional costs that come with every home purchase.

TAXES

The most significant costs for most purchasers are taxes: property taxes, land transfer tax and, in some cases, harmonized sales tax (HST).

TAXES, INSURANCE AND LEGAL FEES WILL ADD TO THE PRICE OF YOUR NEW HOME Property taxes can vary widely by region and need to be considered when comparing properties.

Land transfer tax is a one-time tax, payable on closing.

It’s calculated according to a formula, so you’ll know the number upfront.

INSURANCE

We all know what they say about death and taxes, but when buying a home, insurance is equally unavoidable.

Lenders require proof of insurance before providing mortgage funds.

Most buyers know home insurance covers risks like

you against defects in title and complements the work that lawyers do to protect your legal interests.

Premiums are very affordable when the benefits of title protection are considered.

Talk to your lawyer to learn more.

A real estate lawyer can identify and solve potential problems, such as liens (debts) on the property or missing building permits.

Your lawyer can confirm whether your plans for using or renovating the property are permissible, and will ensure that your ownership is official by registering your title.

That’s considerable assurance for a few hundred dollars.

For more information, visit the Real Simple Real Estate Guide at titleplus.ca.

Your budget should leave room for legal fees.

— newscanada.com

Property taxes can vary widely by region and need to be considered when comparing properties. fire and theft, but there’s more to your insurance needs than just that.

As a homeowner, you will purchase “title” to the land on which your house is built.

While damage to bricks and mortar can generally be repaired, a title flaw can impair your right to transfer, renovate or mortgage your home.

Title insurance protects

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