Buying a home in Kelowna’s current market is no simple task. In the last 2 years, we’ve seen a spike in the housing market that has left many people with very few options or not enough capital for property ownership. However, with the right tools, knowledge and an experienced assistance buying a home in Kelowna can be a bit more manageable.
Get your Mortgage Pre-approved
If you don’t already know this, buying a home can be expensive. In fact, it is very likely to be the single most expensive purchase you will make in your life. For most people, the only way they can buy a house is to get a mortgage. A mortgage is a loan that is backed by real property. It is provided by a lending institution, and
legally binds you to very specific terms that vary depending on the program you are offered. These terms include things like the interest rate, minimum monthly payments, and the duration of the loan. Beyond that, the terms of the mortgage also cover details such as (in the case of a variable rate mortgage) how long you will pay
a certain rate, how often that rate will fluctuate and under what circumstances, and how many payments you can miss before the bank repossesses your home (don’t let this happen!), Getting pre-approved for a loan isn’t mandatory, but it can make the difference when you are in the market to buy. If you are serious about buying a home, we recommend that you get pre-approved. This is primarily so that you can figure out your price range and start making plans around it. Beyond that, pre-approval puts you in
a better position when making offers; you will be taken far more seriously if you have a lending institution backing your intent to buy.
The Down Payment
So now you’ve been pre-approved for a loan, and you are eager to get out there and start looking for a new home that sits comfortably within your price range. You may not know however, that there is still one more financial barrier that stands between you and owning a home: CLOSING COSTS Closing costs include things like home owner’s insurance, inspection and appraisal fees, lawyer fees, and other more minute dues. The largest closing cost that you will incur is the down payment, which is a minimum
amount that must be paid immediately upon purchasing your home. The amount of the down payment varies, and is normally calculated as a certain percentage of the home’s full purchase price. For example: – The minimum down payment on a house under $500k is typically around 5%, while the payment for a house between $500k and $1 million is normally closer to 10%. Depending on the institution you go to for your mortgage and the program that you are offered, the exact amount of your down payment may vary. If you don’t have much in the way of capital, we recommend that you do whatever you can to pull together savings that are at least 5% of the amount for which you have been pre-approved
First Time Home Buyers Discount
If this is your first time buying a home, you may be eligible for BC’s First Time Home Buyer’s program, which can reduce your property transfer tax significantly, sometimes even eliminating it completely. For full details of the program and to see if you qualify, take a look at the government of BC’s website at: http://www2.gov.bc.ca/gov/content/taxes/property-taxes/property- transfer-tax/understand/first- time-home- buyers
Find your new Home
If you have gone through all of the steps mentioned earlier on, you have set the foundation for a smooth transition into buying a new home. Now that the more tedious aspects of real estate financing have been considered, it is time to actually get out there and find your dream home. With each property you look at, it is important to be mindful of a few things: What kind of home are you looking for? How far away is it from your place of work? What are the nearby amenities? How safe is the neighborhood?
How close is it to public transit systems? What quality of schools are in the area? It is up to you to decide which of these factors happens to be most important, and which you may be able to live without. Learning to assign importance and make compromises with the above is paramount when looking to find the right balance between practical affordability and having everything that you want. Approach searching for a home from an open-minded standpoint, and you just may find that what you were initially
looking for isn’t exactly what you need. Visit lovekelownaliving.ca to find out more about the distinct communities within Kelowna, and determine which of these boroughs has what you are looking for in a home.