Wandering, wondering and worrying are some common traits of all first time house buyers. People are especially perplexed when looking for a home in large and crowded cities. Don’t worry; instead, be glad that you’ve decided to take this important step because purchasing your first home is a significant achievement. While plunging into homeownership, you can pursue a quick guide that we have curated for first time house buyer in Calgary.
Calgary is a renowned place growing as one of the wealthiest, cleanest and most livable cities in Canada. A first time home buyer in Calgary benefits from a reasonable cost of living, a reliable employment centre and low taxes.to settle amidst the favourable hues of the province’s general capital tax, sales tax, and municipal sales tax.
So why lose the chance? Give this first-time house buyers’ guide a quick read to reserve yourself a luxurious lifestyle ahead!
Easy Steps to Follow before Buying Your First House in Calgary
Consider these steps as a first time home buyer to reap all real estate benefits in Calgary:
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Role of Employment in Buying a House
- A first time house buyer in Calgary requires an employment source, be it a full time permanent job, part-time job, or self employed business. Generally, a mortgage lender prefers a person to have a full time permanent job, or to have been working regularly for the last 6 months. The mortgage lender will ask for a formal employment letter to confirm the employment details given by you.
- When you purchase your first house in Calgary, then try not to change your job in between, at least until the possession period, as the bank might call your employer to confirm if you are still working there. Also, try not to make any big purchases like a car that could affect your credit score.
- You can also claim the higher mortgage amount if you apply with your spouse or another member of your family who has a stable job.
- If you are a self-employed person, then be prepared with the past 2-3 years of income proof. The lender might also ask you to show your financial statements, tax returns, required business documents, and your turn over.
- Always ensure that you have no dues before you look into purchasing a house. Any due corporate tax like HST/GST could cause credit problems, which might question your ability to repay the mortgage.
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Excellent Credit Score
- You must have a good credit score, which shouldn’t show heavy debt in your credit history. In Canada, mortgage lenders identify your financial health and your debt repayment ability via your credit score. The score of your credit history could range anywhere in between 300 and 900, based on which your financial health is determined: poor, fair, good, or very good.
- The minimum credit score that you require for mortgage approval is somewhere in between 620 and 680 depending on the lender. Thus, the higher the credit score you have, the lower the mortgage rates in Calgary you will get.
- Make sure that apart from the credit score, your credit reports also speak well of you because the lenders will also cross check that. The credit report has all the information about the number of credit accounts you have, late payments, the length of your credit history, and the overall debt level.
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Down-Payment: The First Step to Buying a House
- Most people use a major part of their savings as a downpayment. So if you are also a first-time house buyer in Calgary, then you could also do that. Looking to purchase a new house? Always remember that the house will always need some amount of cash upfront. And always bear in mind that the more money you save for the downpayment, the more easily you will get the mortgage approval.
- Well, less or more, but the downpayment is essential to get the mortgage approval. But it is advisable to put the most towards the house because, on the other hand, this will lessen the amount of money you would have to borrow and the amount of interest you have to pay.
- Also, a family member of yours could give you the amount of downpayment you need. In such a case, a written notice is required saying that this amount is gifted with non-refundable intentions and shouldn’t be considered as a loan. Also, try not to have any additional loans as it affects your credit score, which might cause problems in qualifying for the mortgage.
- The minimum down payment in Canada depends on the value of the property you are purchasing. But usually it is 5% of the purchase price. But the down payment amount differs as per the increasing value of the house. Thus, you can approach the professional to keep you informed of the current real estate market norms.
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Pre-approved Mortgage
- A pre-approved mortgage broadens the house options available to you within your budget and in your preferred location.Therefore, always choose your mortgage professional very precisely, who can provide you with the type of mortgage, mortgage amount, and interest rate prior to 90-120 days to help you hunt the best.
- Holding a pre-approved mortgage, the next thing you have to do is to approach an expert realtor who values your time and your emotional state with the purchase property. Thus, an expert realtor always puts in extra effort based on their market experience and helps you fetch the best out of the rest.
- Banks and independent mortgage lenders might vary in the mortgage amount. There is a difference between advertised rates and discretionary rates, which usually people don’t understand and just accept the first proposed mortgage offer by the bank, whereas a realtor could help you negotiate the mortgage amount with the mortgage professionals.
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Realistic Expectations of the Calgary Property Market
- It is always important to understand the current property market as it is always affected by the demand and availability of properties, which somehow fluctuates the property value. So always learn the market deeply to make a decision and let your realtor negotiate the lower purchase price in the buyer’s market.
- As per 2021, Calgary experienced an intense seller’s market during the spring of 2021, which was considered the hottest market since 2014. Most of the houses in the city were sold above the listing price.
The Easiest Way to Buy Your First House
First time house buyers in Calgary must follow these shortcuts to filter your property hunt:
- Decide the house depending on your family size. If you have kids, then it’s better you choose a townhouse instead of an apartment.
- If you have health issues, then you must not buy a split-level or bi-level house.
- If you have pets, then look for a house that has a fence yard or backyard.
- If you chase peace, don’t look for an apartment or a duplex.
- If you like a spacious house that has enough space in between with a large backyard, then you must not buy an inner-city home. The inner-city houses are close to their neighbors, narrow, and have small yards.
- If you want to buy a house for a rental purpose, then search for a house that has a suite in it.
Seasons of the Calgary Real Estate Market
Usually, Calgary experiences several new house listings during the spring season, i.e., March and April. In comparison to the spring season, there are fewer listings in the summer time as well. Besides the spring and summer, there comes the fall and winter with a few house listings, which are otherwise considered a quiet season in the real estate market of Calgary.
The Advice of Expert Realtors
Being a first time house buyer in Calgary is a dream for many people in Canada. Calgary is a place where people reside in luxury whilst pocketing their budget. To buy your dream home, you need to have a permanent income source, healthy finances, a minimum downpayment and a pre-approved mortgage. Although, one could do this all by themselves having a piece of advice is always a good choice to make a right decision. Therefore, an experienced realtor can always help you deal with the realistic market expectations during the right property season by keeping you informed of the easiest way to buy your dream home.
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Frequently Asked Questions
A first-time home buyer is a term referring to those people who have never owned any property before.
There are several advantages that a first-time home buyer gets, like a GST/HST housing rebate, a first-time home buyer incentive, no more rent, and a rebate on land transfer tax.
Some essential tips for a first-time home buyer include a buyer’s focus on the location; fixing your budget; deciding the type of home; choosing a reputed builder; considering the amenities; and opting for the right home loan.
A first-time home buyer in Canada must be a working professional in the country, be it a permanent resident or non-permanent resident of Canada. What constitutes a first-time home buyer?
What benefits do first-time home buyers get?
What are some essential tips for a first-time home buyer?
What are some of the mandates in Canada for first time home buyers?
