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Tips When Considering Buying a Home in Calgary

Buying a home is probably the largest financial decision and financial investment that
most individuals will ever make. However, some individuals never take the necessary
time to prepare while others do not know where to begin. If you are considering buying a
home in Calgary, here are the steps involved in the process as well as some helpful tips.

STEP ONE

The very first thing you need to consider before you even think about buying a home in
Calgary is whether or not you are ready for home ownership. The fact of the matter is that
purchasing a home is a huge commitment and not one you can easily get out of if you
wind up having buyers remorse later on. That is why it is important to sit down and really
think about your purchasing decision before hand.

TIP: It is a good idea to sit down with friends and family that you trust and talk
honestly with them about your decision. If they love you enough they will let you
know if you are ready or not and who knows, they may even have some good
advice to share.

Take into consideration that buying a home is vastly different from renting. In buying a
home, you become solely responsible for all the maintenance and repairs of your home.
Most home buyers also forget that in addition to the mortgage payment they will also have
to contend with all of the utilities and other costs such as homeowner association dues.

Here are some key questions to ask yourself and can provide some talking points to
discuss with your friends and family about your decision to purchase a home.

  • Are you financially responsible?
  • How stable is your source of income?
  • Do you have the time necessary to dedicate to the cleaning, repairs and upkeep associated with purchasing a home?

STEP TWO

Consider your needs now and your needs of the future. Remember, purchasing a home is
an investment and you want to make sure your home will be able to fit your needs in the
future. Picture yourself five to ten years from now:

  • Are you going to have children?
  • Do you want pets?
  • Do you foresee many visits from friends and family? Then a guest bedroom might be a good idea if you can afford it.
  • Do you need a one car or two car garage?

Here are some key features that you will want to consider when deciding on what home
you wish to buy:

  • Size: How many bedrooms, baths, do you need a home office, guest room etc.
  • Special Features: Garage, storage space, amenities like a pool, air conditioner, fire place? Is it a “green home,” or energy efficient?
  • Your lifestyle: Are you just starting out or are you established with children getting ready to head of to college? Are you starting your career or getting ready to retire?
  • Neighborhood: The old adage “location, location, location” is still relevant today.
  • Do you want to live in the city, a town or out in the country? What about your commute time to get to and from work? Schools?

TIP: Most home buyers do not put enough research into the neighborhood.

STEP THREE

Find the home that meets your needs. Consider whether or not you want a used home or
a brand new home or do you just want to build your own. Also, consider what type of
home you would like. (the property types and descriptions are provided courtesy of the
Canadian Mortgage and Housing Corporation)

Single-family Detached

A single-family detached home is one dwelling unit. It stands alone, and
sits on its own lot. This often gives the family a greater degree of privacy.

Single-family Semi-detached

A semi-detached home is a single-family home that is joined on one side
to another home. It can offer many of the advantages of a single-family
detached home. It is often less expensive to buy and maintain.

Duplex

A duplex is a building containing two single-family homes, located one above the other. Sometimes, the owner lives in one unit and rents the other.

Row House

Row houses (also called townhouses) are several similar single-family

homes, side-by-side, joined by common walls. They can be freehold or
condominiums. They offer less privacy than a single-family detached
home, although each has a separate outdoor space. These homes can cost
less to buy and maintain, even though some are large, luxury units.

Stacked Townhouse

Stacked townhouses are usually two-storey homes. Two two-story homes
are stacked one on top of the other. The buildings are usually attached in
groups of four or more. Each unit has direct access from the outside.

Link or Carriage Home

A link, or carriage home, is joined by a garage or carport. The garage or
carport gives access to the front and back yards. Builders sometimes join
basement walls so that link houses appear to be single-family homes on
small lots. These houses can be less expensive than single-family detached
homes.

Manufactured Home

A manufactured home is a factory-built, single-family home. It is
transported to a chosen location, and placed onto a foundation.

Modular Home

A modular home is also a factory-built, single-family home. The home is
typically shipped to a location in two, or more, sections (or modules).

Mobile Home

Mobile homes, like manufactured or modular homes, are built in factories,
and then taken to the place where they will be occupied. While these
homes are usually placed in one location and left there permanently, they
do retain the ability to be moved.

Once you have determined your needs, and what type of home you want to live in, you
have a good idea of what it is you are looking for.

STEP FOUR

Are you financially ready? Now that you know what type of home you are looking to buy
in Calgary as well as the neighborhood you can start getting an idea of what the home
prices are and with that, you can determine if you are financially ready.

Key points to consider:

Your debt to income ratio

TIP: Rule number one, your housing costs alone cannot exceed 32% of your

total gross monthly income. Rule number two, your entire monthly debt load
cannot exceed more than 40% of your total gross monthly income.

Your credit worthiness

Sufficient funds for closing costs and down payment

Once you have determine the above, contact a mortgage lender and go through the
process of filling out an application. You want to do this specifically so that you can
obtain a “mortgage pre-approval.”

TIP: Obtaining a mortgage pre-approval letter is a significant step and indicates
to both real estate agents and home sellers that you are serious and more
importantly can afford the home. Nothing frustrates realtors and home sellers
more than having someone waste their time only to find you later on that they
could never afford the home in the first place.

STEP FIVE

Find your home and start the home buying process. You will be making an offer and once
accepted a “purchase and sale agreement” will be drawn up and you should be prepared
to deposit “earnest money.” Once you have a bona fide purchase and sale agreement you
will take that to your mortgage lender, usually the one that drafted your pre-approval
letter since they will already have most of your paperwork ready.

Once they have a purchase and sale agreement the mortgage lender will begin the process
of securing your loan.

TIP: Be prepared to wait. Some mortgages can take as long as 30 to 45 days to
close.

Once the loan receives approval, the mortgage lender will notify the title and escrow
companies to prepare for the closing. At which point, you will be notified of your closing
date and where you will need to go to sign the paper work. It will be at closing where you
will need to be prepared to pay for your closing costs and any down payment that might
be required.

TIP: While you are in the home buying process, DON’T DO ANYTHING. Don’t
change jobs, don’t go on a shopping spree for new furniture and appliances. Do
nothing that could adversely effect your credit worthiness. Lenders will always
run a last minute check on your credit worthiness, usually right at or before your
closing date just to make sure you are still credit worthy. Lenders will cancel the
loan if they see any troubling information.

Once you have signed the paper work and the money has exchanged hands you should
congratulate yourself; you are a new homeowner in Calgary.

Hopefully this step by step guide to buying a home in Calgary has provided you with
some good information and some good tips on making your home purchase in Calgary a
smooth and less stressful process.

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