Real Estate

Buying Your First Property

The first step for buying a property is finding out how much you can afford. See my budgeting page to get a better idea. Once you know what your budget is, you can start shopping.

Think about what you want most in your first property. Hopefully, prime location isn’t high on your list. You will pay a premium on both the property itself and the property tax. On the bright side, you might get more when it comes time to sell but you will have to wait a while to realize those gains. I opted for a less desirable location that met all my requirements for a home and was close to work. I chose a house that after mortgage, utilities, property, and condo I still have money left over to invest. It’s best to buy a house with the intention of living in it for at least five years because there are many closing costs and you could have to pay 5% of the home price to real estate agents when you sell. If you put less than a 20% down payment on a house you will have to pay for CMHC insurance which is a percent of the loan amount.

Once you find the house of your dreams… knock it off! Just think of it as one great option out of many available houses. Make sure to get a home inspection before making an offer. Foundation or mold problems could cost you thousands. Now that it’s just one option you won’t be disappointed if the deal falls through.

Instead of getting a mortgage directly from your bank, shop around or find a mortgage broker. Even a 0.1% difference in mortgage rate adds up to a lot of money over 25 to 30 years which is the typical length of most mortgages. If you’re nervous about getting your first mortgage, a mortgage broker will walk you step-by-step through the buying process. I used Di-verse for my first mortgage and was extremely pleased with the service.

After owning the house for 5 years I have built up a decent amount of equity in the property and it’s considered a large portion of my Net Worth. A significant step of being debt-free is paying off your house. However, I renewed my mortgage this year with intellimortgage at 1.74% for a 5 year fixed term. They made the process very quick and easy and had the best rate I could find anywhere. I would recommend using them more for a mortgage renewal than a first-time mortgage. Use my link here if you want a great rate as I received. If you can make an average of 8% return in the stock market I think that’s a better place to put your money than trying to pay off your house as fast as possible. If you’re investing wisely in the stock market you will have enough money later to pay off your house early if you choose to. The term for not investing money and missing out is lost opportunity cost. Carefully weigh the advantages and disadvantages of paying off your house faster.