First-time homeowners concentrate on getting the down payment and shopping for the best mortgage rate, but there are other considerations. Just as important is a house that suits their lifestyle.
Before they are married, young couples have a social life that is largely outside the home. But when they get married, they often are ready to become home-centred. Sometimes they’re not, so they are better off in a town house or condominium with a smaller mortgage and less upkeep; then they aren’t house-poor and have the money to continue taking holidays, playing sports and dining out with friends.
Size of the lot
Is a couple more interested in the lot or in the house? Only then can they decide where they want to put their money.
People who get great joy from building a showcase garden need to acknowledge their passion when they are house shopping and be prepared to get a lesser house.
Location, Location, Location
Where do you work? Ideally, a house should be midway between both work locations. Does a couple need daily access to bus or train routes? If a couple is considering starting a family immediately, a safe neighbourhood becomes a consideration. They will want to buy on a street with little traffic, where there are young families and proximity to a school or daycare.
One person’s bargain is another person’s horror story. A house that needs a lot of work should not be purchased by a couple that doesn’t want to spend all their spare time with saw and hammer.
A bargain is never a bargain when viewed in a void. You need all the pieces to be in place to make that judgement call.
- Shop around until you feel you are getting the information and the rate that you want.
- Let the company know that you are shopping around. They may sharpen their pencil.
- Get expert advice on current financial conditions so you make an informed decision on the length of the mortgage.
- Understand the terms of the mortgage. On what basis can you increase the payments if you want to step up the pay down?
- What are the terms or penalties for early total payoff of the mortgage if that should become a possibility?
- Can this mortgage allow you, when you’re ready to purchase or upgrade to a larger home?
- If rates are expected to go up, lock in. If rates are trending down, you likely will choose a variable rate. People on fixed incomes usually are more comfortable locking in to a mortgage rate.