One of my favourite members (we’ll call her Lisa) walked into my office and slumped into the chair across from me. I gave her my “what’s up?” look.
“When is this going to be over? I thought buying a home was supposed to be fun. It seems like every day a zillion more questions pop up. I can barely think straight!”
I smiled at her. The first time Lisa came into my office, it was to discuss mortgage pre-approval. She was ready to move out of her condo, into a home with some space for a garden, within biking distance of the engineering firm where she works. Lisa strode in, motivated and excited; she had already done a lot of research online, and had a list of questions for me written cleanly in her notebook. Now she was looking a little deflated, and her page of notes was mostly filled with swirly doodles.
But Lisa was right. There’s a floodgate of decisions that opens when you buy a home – not just with your first home but any home. I told Lisa that I was the wrong person to help her choose paint colours or shade-loving plants, but that I am here to help her navigate all her new homeowner questions.
There were more conversations and jot notes to come, but on this day we covered a few of the questions she had about budgeting for what’s coming. Here are some common questions soon-to-be new homeowners ask:
1. What further Closing Costs should I prepare for?
Our mortgage specialists, or a real estate agent or lawyer, will outline the closing costs that will apply to your home purchase. These may include BC property transfer tax (currently between 1% and 2% of the purchase price), GST on brand new homes, reimbursement for annual property taxes and utility fees already paid by the last homeowner, and legal fees. You should be able to get an exact calculation of these costs, which will be due on your closing date.
2. How should I estimate my Moving Costs?
From DIY to a ‘full move’, look closely at the costs and insurance implications of different scenarios and different companies. You might be charged by the hour (usually for a local, same day move) or by weight or volume of your goods. Get recommendations for, and estimates from, a few different moving companies so you get an idea of costs well ahead of time. A ‘full move’ is when the movers pack, load, move, then unload and unpack for you at the other end. When it’s time to get more specific than a ballpark estimate, walk the movers through everything you’ll be moving, including your garage, basement, storage locker or shed, so there are no surprises on moving day! And stay on top of your paperwork – experienced movers will have a thorough system for cataloguing what’s been packed and loaded, to ensure everything makes it safely to your new home.
3. What do I need to know about my Mortgage Payment?
When it comes to paying your mortgage, there are options to help make payments manageable and help you pay off your mortgage sooner. Automatic payments ensure your mortgage is paid on time, every time, right from the start. How often you make those payments will affect the balance of interest and principal you pay over the life of your mortgage. I always advise members to build up an emergency fund that will cover 3 months of mortgage payments, just in case. And if you every foresee trouble making a payment, don’t ignore it – talk to your lender so you can work together to find a solution.
4. Do I need to budget for Settling In?
Budget for things you’ll need the day you move in – like utility deposits, home insurance, strata fees, a street parking permit, and a few restaurant meals until you’re settled. Think about whether you’ll need new appliances, window coverings, gardening or snow equipment, or safety enhancements like carbon monoxide detectors or new fire extinguishers. Your home may feel homier after thorough duct cleaning or carpet cleaning, and safer after a visit from the locksmith and security system people.
5. What about Renovations?
You may have some work to do on your new home to make it feel truly yours. It might be work to be done before you move in, or in the first few months that you’re there. Always get competing estimates and ensure they are detailed so you can easily compare and know what you are getting for your dollars. Build your wish list, but stay flexible. Balance the cost of renovations against the payoff – some renovations pay for themselves over time because you save on utility bills or increase the resale value of your home, and some will be worth the money just for the comfort they create.
During our discussion, Lisa made notes on a fresh page. I helped quantify some of the zillion new homeowner decisions she had swirling around in her head. Which gave us the space to recognize Lisa was actually well prepared to be a homeowner, had the money she needed for all new homeowner costs, and what a very proud moment this was. She even beamed, a little. Then she bounded out of my office to test-drive new barbecues.
What questions do you have about buying a home? Get in touch with our Mobile Mortgage Specialists. We’ll even come to you, with the convenience of evening and weekend appointments. We’re here to help.