Millennials are people that are probably just now looking to purchase real estate. Buying a home is a very big purchase and it’s important to learn from other people’s mistakes. In order to help you do just that we found this article with seven different mistakes that millennials often make. We hope it helps you get your dream home and save some money!
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From the article:
You’ve cut back on lattes, taken a soul-crushing job on Burrard Street or 2nd Street SW, and borrowed from mom and dad. Congrats! You’re ready to put down a chunk of cash to cover the 20% downpayment on a property. But don’t make newbie mistakes, like trusting your bank to look after you. “The reality is that best rates are not always offered up front,” says mortgage broker Atrina Kouroshnia, 29, of Lavarates.ca in an email.
And don’t forget to look into subsidies, discounts and programs like the Home Buyers’ Plan for first-time buyers. Here’s what you need to know before you sign on the dotted line.
Putting every last cent into a downpayment
Hold on just a second. Tempting as it is to pour all your savings into a home, it may not be the best idea with today’s crazy prices.
“For our parents, it was normal to take out a $200,000 to $300,000 mortgage, whereas now first-time home-buyers regularly borrow $700,000 to $800,000,” says Brandon Wasser, a 29-year-old agent with Royal LePage in Toronto.
Should you divorce, or your car breaks down, those monthly mortgage payments may be impossible to meet. “I’ve seen people buy a place, lose their jobs, and they have to sell quickly because they can’t afford the monthly payments,” Mr. Wasser says.
Solution: Set aside some money. Mr. Wasser recommends socking 6 to 12 months of living expenses in an emergency fund.
DIY property searching
Mr. Wasser says Millennials often search on MLS, find a property they like, and contact the agent pictured. Oops! That’s the listing agent, who works on behalf of the seller. You end up telling him what you can afford and are willing to pay, which is information he’ll pass along to the seller — hurting you in negotiations.
Solution: You don’t have to stop searching MLS addictively under your duvet late at night, but hire a realtor first. “That agent will now be in a relationship with you, where they have legal obligations to you.” Mr. Wasser says. “Everything you say to them is confidential.”
Debating between buying and renting? Then checkout this article about buying vs. renting that could be of interest to you.