Thinking of buying a new home in Calgary? Whether you're a first-time buyer or looking to move within the city, don’t skip these three crucial steps:
Step 1: Determine Your Budget
Before you start browsing for new homes, it's essential to establish a clear budget. Without a well-defined budget, you risk wasting time and energy on properties that may be out of your reach.
Assess your financial readiness
Begin by taking a close look at your finances. Consider your savings, income and debts while considering the following:
- Savings and down payment: Calculate how much you can put toward your down payment. A larger down payment often results in better mortgage terms and lower monthly payments.
- Credit score: Check your credit score. Lenders use this to determine your creditworthiness. A higher score can lead to better mortgage rates.
- Monthly expenses: Calculate your monthly expenses, including existing loans, bills and everyday spending. This will help you determine how much you can comfortably allocate to a mortgage payment.
Calculate your down payment
In Alberta, a down payment of at least 5% of the home's purchase price is typically required. However, providing a larger down payment can offer significant advantages, including lower mortgage insurance costs and a better interest rate.
Consider additional costs
Keep in mind that the purchase price isn't the only cost associated with buying a home. You'll also need to budget for:
- Closing costs: These include legal fees, land transfer taxes, and other expenses associated with finalizing the purchase.
- Property taxes and home insurance: Research the annual property taxes for the area you're interested in and budget for them accordingly. It’s also a good idea to compare home insurance options to find the plan and premium that work for you.
Discuss pre-approval for a mortgage
Getting pre-approval for a mortgage is a smart move. It helps you understand the amount you can borrow and demonstrates your seriousness to sellers. To obtain pre-approval:
- Gather financial documents: Get all your documents—tax returns, pay stubs and bank statements—in one place.
- Consult with lenders: Reach out to multiple lenders or mortgage brokers to find the best mortgage rates and terms.
- Get pre-approved: Complete the pre-approval process with a lender to receive a conditional commitment for a mortgage.
All this will set a strong foundation for your home-buying journey. With your budget in hand, you're ready to move on to the next step: defining your needs and preferences.
Step 2: Define Your Needs and Preferences
Now that you've established your budget, it's time to narrow down your options and focus on properties that align with your lifestyle and long-term goals.
List your must-haves and nice-to-haves
Start by creating a clear list of your must-have features and nice-to-have amenities. This list will serve as your guide when evaluating potential homes.
Must-have features might include the number of bedrooms and bathrooms, proximity to schools or public transportation, and specific requirements like a fenced yard for pets. Nice-to-have amenities might be things like a garage, a walk-in closet or a spacious kitchen.
Step 3: Research the Calgary Real Estate Market
Calgary has a wide range of neighbourhoods, each with its own unique character and amenities. When searching for a home, consider these factors:
- Urban vs. suburban: Consider whether you prefer the vibrant energy of urban living or the tranquility of suburban life..
- Proximity to amenities: Think about your day-to-day life. Then determine how close a given property is to things like schools, shopping centres, parks, public transportation, and health-care facilities.
- Community vibe: Take the time to get a handle on the atmosphere and community spirit of each neighbourhood. Some are known for their family-friendly atmospheres, while others are popular with young professionals.
- Future development: Look into future development plans and infrastructure projects that may impact property values and your quality of life in a particular neighbourhood.
Buying a home is a significant undertaking, and it's normal to encounter challenges and uncertainties along the way. Patience and diligence are your allies. Remember that the perfect home is out there. With careful planning and perseverance, you'll find it.