So you’re thinking of buying a home-Exciting! You’ve done the math and can afford the mortgage payments within your budget (if you haven’t, and need help with that- we can help) Our Lore Group Agents can’t wait to help you get started on your journey to home ownership! But before you do, let’s chat a bit about money, debt, and affordability. Because it’s important to know that mortgage payments are not the only payment you’ll need to consider to sort out a feasible budget and what price of home to buy. Full disclosure: We’re Real Estate Agents, not financial experts….but that doesn’t mean we haven’t learned some helpful financial tips along the way, that we’d love to share with you (You should of course, seek the guidance and expertise of your financial advisor as well, before making any big financial decisions):

Tip #1  LEAVE YOURSELF WIGGLE ROOM: Consider not maxing out your limit. Certainly, we want you to find a home that you love, and will suit your needs for years to come (and we can’t wait to help you get started!) But while you can lock in your current monthly mortgage payments for a period of time (typically 2-5 years), you should be prepared in the future if interest rates were to increase. Similarly, property taxes rates, and utility costs can all fluctuate with inflation, so leaving yourself plenty of breathing room will come in handy should those situations ever arise. And if not, that just leaves you more vacation moneyJ

Tip #2 PLAN TO SAVE: Open a dedicated savings account for future home maintenance and repairs. Home ownership comes with many joys and responsibilities. Whether your home is new or old, unexpected repairs can and will come up that you’ll need to deal with right away; your hot water tank gave out and needs replaced (unless cold showers are your thing). Your dishwasher stopped working (who wants to wash dishes by hand). You’ve got a leak under your sink and need to call the plumber (duct tape doesn’t work. Seriously, it’s been tried). These types of things will happen at some point and saving for them can avoid a lot of financial stress and burden in the future. Consider setting aside at least 1-2% of your homes’ value, per year, in your home maintenance savings account.

Tip #3 PAY THE BANK LESS: Want to be mortgage free faster? Consider increasing your monthly mortgage payments. This doesn’t necessarily need to be a lot. You’d be surprised at how much you will save in the long run and how much faster you will pay off your mortgage, simply by adding a couple hundred dollars or more to your monthly payment. For example, on a $500,000 home purchase with 5% down, increasing your mortgage payments from $2282 to $2482 (that’s based on a 5yr. fixed rate of 3.14%) you’d have your mortgage paid off 3 years faster. Or if this is a starter home and you plan on upsizing into another home in the near future, you’ll have more equity available at the end of your term for your next home purchase.

Buying a home isn’t just about looking at beautiful houses (but it definitely is the FUN part). With the Lore Group, we’ll help you with the FUN part, and of course are happy to share our tips and real estate advice we’ve learned, not just from our careers, but from our own personal experiences in real estate along the way. Reach out to us today at 780-370-3325 for all your real estate questions and for your own personal buyer consultation with one of Lore Group Agents.

THE NUMBERS ARE IN…Here are January 2016 Fort McMurray Real Estate Stats

TOWNHOUSE CONDO
Active Listing 85
Average Sale Price $399,625
Number of Sales 4
Average days on market 345

SINGLE FAMILY HOMES
Active Listing 382
Average Sale Price $631,014
Number of Sales 32
Average days on market 143

MOBILE WITH LAND
Active Listing 47
Average Sale Price $364,667
Number of Sales 3
Average days on market 44

DUPLEX
Active Listing 69
Average Sale Price $505,000
Number of Sales 2
Average days on market 370

APARTMENT CONDO
Active Listing 124
Average Sale Price $333,725
Number of Sales 4
Average days on market 225

*The interpretations of the data are the opinion of Susan Lore and may not the views of the board or its members.

SMART HOMEBUYERS DOWNPAYMENT PLANS

It’s not quite time yet but you’re beginning to think seriously about buying your first home. Among your early considerations are how much home you will be able to afford and how you are going to finance your purchase. You’ve heard about the Home Buyers Plan (HBP) and the Tax-Free Savings Account (TFSA) and you’re wondering which of these might be the best home-financing option for you. Take a look at both options:

HOME BUYERS PLAN (HBP)

Did you know you can use your RRSP savings for a DOWN PAYMENT on your home?

With the federal government’s Home Buyers’ Plan, you can use up to $25,000 of your RRSP savings ($50,000 for a couple) to help finance your down payment on a home.

To qualify, the RRSP funds you’re using must be on deposit for at least 90 days. You must also provide a signed agreement to buy or build a qualifying home.

The best part is the withdrawal is not taxable as long as you repay it within a 15-year period. The payback amount is at least one-fifteenth a year of the amount you withdrew from your RRSP.

Using your RRSP’s as a downpayment may be a great option as you have the ability to draw from some of your existing resources and it might possibly allow you to put down the 5% required to finance a home or accumulate the 20% down payment needed to avoid having to pay default insurance premiums. Even if you already have enough money for your down payment, it may make sense to access your RRSP savings through the Home Buyers’ Plan.Tax-Free Savings Accounts

TAX FREE SAVINGS ACCOUNT (TFSA)

There are No “first-time home buyer” restrictions and No dollar limits on the amount you can use. There is no requirement to repay your TFSA withdrawal, so you won’t encounter tax issues down the road.

You can use either or both of these options to help you buy your home. Chat with a mortgage professional to find out which options might work best for you. The Fort McMurray Real Estate market has some fantastic bargains for buyers. Now could be the perfect time to buy a home.