The Perfect Home and Mortgage
people consider buying a home one of the most important
decisions they make in their life but actually,
buying a home is relatively easy. There are several
hundred good books on the library shelves on the
topic of home buying, how to select a home, what
to look for and so on.
Further, there are numerous professional Real Estate
salespeople, Associate Brokers and Brokers across
Canada that belong to both provincial and national
real estate associations. The Canadian Real Estate
Association (CREA) represents real estate board
members from across Canada.
There are various real estate ''experts'' who can
be called upon and mountains of information to be
viewed to cover the topics of home prices, trends
and statistics as they relate to the art of buying
looking at a home purchase as being important is
only a small part of the real reason why buying
a home is such a monumentous decision. The fact
is, buying a home is a big decision because we go
so deeply in debt to finance the house of our dreams!
Canadians have now borrowed several times their
annual Gross National Product (the value of all
goods and services produced in the country in a
given year) and many more times the Gross National
Income (the total wages and salaries paid to Canadians
in a given year) in the form of mortgages.
The consequences of non-payment of this debt creates
a great deal of personal financial problems, which
some contend are part and parcel of many other social
problems in our society.
In other words, it is not the purchase itself, but
the debt incurred to purchase a home and our level
of comfort with incurring that amount of debt that
is the really important factor in buying a home.
Debt deserves our understanding and respect.
Older versus newer homes
When considering the purchase of a home, one of
the questions that may arise is whether to look
at new homes or older (resale) homes. There are
many considerations that go into this decision,
including each person's preference and opinion of
both. However, beyond this is the matter of the
various mortgage financing options available today.
Financial institutions may be more inclined to finance
the purchase of a newly built home for two reasons.
First of all, a new home is covered by the New Home
Warranty Program, which provides some measure of
security. Secondly, building a new home will often
keep any unanticipated drastic expenses to a minimum,
making the purchase of the house and repayment of
the mortgage more predictable.
Also, institutions generally look at the state of
repair of the property they are considering for
financing. They are concerned that their investment
will be secure for the full term. With a new home,
there is a higher level of confidence that the property
will sustain its value throughout the term and,
in the worst case, that if the institution has to
dispose of the property to recoup their funds, prices
will be more stable.
Zee (Zdravko) Dimov, RRS
RE/MAX Ultimate Realty Inc.