While many Calgary renters love looking at listings of Calgary SW homes for sale, not everyone can afford a Calgary SW home or Calgary Luxury homes for their very first purchase. Getting on the property ladder is important but don’t make the mistake of buying just any home just so that you can get on that ladder. You want to be sure you purchase something that will suit your needs in the short term from a housing perspective and that will suit your longer term plans from a financial perspective. You want to buy a house that has the potential to sell when you are ready to trade up to something closer to your dream house — not be stuck with a home that won’t sell when you’re ready to make a move.
Here are some tips that can help you transition from renter to buyer as well as tips to help you ensure you do so pragmatically — for your living situation as well as your financial situation.
Saving Your Down Payment
Making the move from renter to buyer can be a challenge, particularly with the fact that rental payments can often make it difficult to save for a down payment. Living on a strict budget as well as doing your best to save money is the best way to approach things. Any income increases or bonuses could go into your down payment fund. While you build that fund, keep it in a high-interest savings account so it’s not readily available to be spent. While you save money, do your best to get your credit in stellar order so that you look like a good candidate for a mortgage to prospective lenders.
Don’t Forget About Additional Funds Required
Beyond the down payment, which can range from 5% to 25%, depending on the price of the home and your earnings as well as your credit status, you’ll want to save another 1-2% for closing costs as well as put away a nest egg of about 6 months of expenses. These six months of mortgage and utility payments put aside will not only help you sleep at night but shows potential lenders that you’re well-positioned for the responsibilities of home ownership.
Make Sure You Look Good on Paper
Have you run your credit report to ensure everything looks good for potential lenders? This is important! A mistake or something you inadvertently forgot to take care of could either cost you more from an interest perspective or could mean that you have trouble securing a mortgage at all.
Part of your efforts to save your down payment should also be to reduce your debt ratio. Pay off high interest credit cards first and then you can find that as your debt shrinks you can dramatically boost your down payment amount — getting you into your own home sooner.
Make sure you do a bit of shopping around for a mortgage, too. Many people now look to a mortgage broker rather than just to their local bank because your credit will be inquired on just once and the mortgage broker will present you with multiple offers. Mortgage brokers do not charge home buyers. They earn a commission from the company you get your mortgage with.
Get Expert Advice on Calgary Real Estate
Len T. Wong and his Calgary real estate team are well-versed in all matters related to SW Calgary real estate. Whether you want to browse starter homes for sale in Calgary, SW or are interested in a condo, we can help. We are also well-versed in luxury real estate in Calgary, too. And if you list a SW Calgary home for sale with us, ask us about our guaranteed offer to sell your home within 90 days.
We can help you check out homes for sale in SW Calgary including around Westhills, Patterson, West Springs, Aspen Hills, The Slopes, and more.
