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Things to Think About when Buying a Home

By Charles Hopkins Published 05/27/2007 |

There is a wealth of information out there about buying your first home. You will talk to ten people and get ten different opinions as to whether this is a good time to buy or not. Buying a home is the first step to financial security and provides an opportunity to establish your roots in society. It is best to get professional advice from a local realtor who knows the market well.

Renting is fine if you are in an area for the short term, but not for the long term. Interest rates are still at a very good level making buying a home affordable for most people.

One of the first things you will want to do is go to the bank or to a mortgage broker to get pre-qualified for a mortgage. The mortgage professional will look at your salary, debt load and credit worthiness to assess what you can afford and what they are willing to lend you. You can compare banks and even negotiate terms of your mortgage. You would want to be able to port your mortgage if you move at a later date and want to take it with you to put on another home. It is a good idea to pay your mortgage biweekly or even weekly, as this can save you many dollars in the long run. By knowing what you can afford will help you zero in on homes that are appropriate for your price range.

Another consideration to think about is whether you want to buy a resale or a new home. There are pros and cons to both. New homes have never been lived in, so you can decorate it to your personality and not adopt someone else's decor. New homes are more stylish and modern, whereas older homes may have more character. Older homes may need more repairs as things start to break down. New homes would still have home warranties in place so you wouldn't have to worry about repairs for some time. Landscaping will be more mature in a used home and may have added features such as a swimming pool, deck, finished basement and air conditioning. You will have to spend money to landscape in a new home and do paving and fencing. This has to be added to the initial costs as well. You can see this decision to buy new or used is a very personal one.

Another question you may have is do you buy a detached home or a condo? If you want to start a new family, a detached home is nice as you can take the kids out in the back yard and play. There is usually no play area in a condo project.

However condos have a life style all their own. You usually get a number of amenities in a condo such as party room, fitness, pool, billiards, games room, etc., making condo living quite sociable. You can leave on vacation and not worry about having someone pick up your mail or cut your grass while away, which is not the case in a detached property. Some people say they don't like the maintenance fees one has to pay in a condo. Usually a large percentage of maintenance fees are utility costs (heat, hydro and water), as well as the upkeep of the condo project. You have maintenance costs in a home as well. You also have to pay for your utilities in your home. All the upkeep and repairs in a home are your responsibility, which can add up over time. It pretty much evens out as far as maintenance costs for both condo and detached homes. In fact it may cost a little more in a detached home as it ages.

Be sure you seek out a good real estate lawyer to review your contract, especially new condos which can have quite complex agreements and can have hidden costs that can add up.

In closing, be cautious, be smart and do your homework. Use professionals to assist you, as this is the largest investment you will probably make in your lifetime.