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Looking for the perfect mortgage?
Buying a home is no big deal |
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Many people
consider buying a home one of the most important decisions they make in
their life but actually, buying a home is relatively easy. There are several
hundred good books on the library shelves on the topic of home buying,
how to select a home, what to look for and so on.
Further, there are numerous professional Real Estate salespeople, Associate
Brokers and Brokers across Canada that belong to both provincial and national
real estate associations. The Ontario
Real Estate Association (OREA) represents the members of the real
estate boards in the province of Ontario while the Canadian
Real Estate Association (CREA) represents real estate board members
from across Canada.
There are various real estate "experts" who can be called upon and mountains
of information to be viewed to cover the topics of home prices, trends
and statistics as they relate to the art of buying a home.
But
looking at a home purchase as being important is only a small part
of the real reason why buying a home is such a monumentous decision.
The fact is, buying a home is a big decision because we go so deeply
in debt to finance the house of our dreams!
Canadians have now borrowed several times their annual Gross National
Product (the value of all goods and services produced in the country
in a given year) and many more times the Gross National Income (the
total wages and salaries paid to Canadians in a given year) in the
form of mortgages. |
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The consequences
of non-payment of this debt creates a great deal of personal financial
problems, which some contend are part and parcel of many other social
problems in our society.
In other words, it is not the purchase itself, but the debt incurred to
purchase a home and our level of comfort with incurring that amount of
debt that is the really important factor in buying a home. Debt deserves
our understanding and respect.
| Older
versus newer homes |
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When considering
the purchase of a home, one of the questions that may arise is whether
to look at new homes or older (resale) homes. There are many considerations
that go into this decision, including each person's preference and opinion
of both. However, beyond this is the matter of the various mortgage financing
options available today.
Financial institutions may be more inclined to finance the purchase of
a newly built home for two reasons. First of all, a new home is covered
by the New Home Warranty
Program*, which provides some measure of security. Secondly, building
a new home will often keep any unanticipated drastic expenses to a minimum,
making the purchase of the house and repayment of the mortgage more predictable.
Also, institutions generally look at the state of repair of the property
they are considering for financing. They are concerned that their investment
will be secure for the full term. With a new home, there is a higher level
of confidence that the property will sustain its value throughout the
term and, in the worst case, that if the institution has to dispose of
the property to recoup their funds, prices will be more stable.
* Link provided is the Ontario homepage. Other provinces
have differing pages.
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