Buying one’s first home is a milestone. It’s a sign of adulthood, independence, financial stability… for many people it is a major accomplishment and the biggest purchase they’ve ever made. We recently sat down with Toni Nicholls, an Interior Savings Mobile Mortgage Specialist, to chat about home-buying and the questions she often gets from buyers. Here’s what she had to say.
Your first home purchase comes with lots of options, pros, and cons. As a Mortgage Specialist, I’ve helped hundreds of first-time home buyers, and downsizers and families move into a new space, and often the first question is: “What Should I Look For: a House or a Condo?” The way I see it, each choice has its own advantages.
Advantages of Condominium Ownership
Condos usually come at a lower price point than detached homes. Yes, there are some million dollar condos out there, but most condos are priced less than detached homes. For example, in the Okanagan area condos are priced between $150k – $400k, where the average home price is $500k+. A lower purchase price means you can start with a smaller down payment. It also means your mortgage payments will be lower. It may mean you can afford to live in an urban centre, close to restaurants, cultural activities, and work, where detached houses in the same area are prohibitively expensive or don’t exist at all. Sometimes, owning a condo is even less expensive than renting.
Other benefits of condo living? Limited maintenance. If you want a ‘lock and leave’ lifestyle, condo living means not having to worry about mowing the lawn, shoveling the driveway, landscaping, exterior paint, major repairs – all that maintenance that comes with owning a house. Condos often appeal to active individuals who spend most of their time away from home, working, travelling or exploring out and about.
The cost of maintenance is usually covered by fees, known as Strata fees. When buying a condo, make sure you understand fully what the monthly Strata fees are, and what they cover. There may be rules, regulations, and restrictions in place. Things like what you can have on your balcony, and where you can store your stuff. The upside: your condo fees provide a level of insurance, and you can get great coverage with a cost-effective Condo Insurance package. Sometimes Strata fees include property taxes or utilities as well. And, there may be all sorts of extras you benefit from: common rooms, a gym, a pool, green spaces, a playground, underground parking, beefed-up security… Strata fees can cover a whole host of amenities that aren’t included in the cost of a house.
A word of advice: go through both the Depreciation Reports and Annual General Meeting Minutes of the Strata Organization before you decide to buy. Be aware of Special Levies for future repairs. When you compare home prices, include these monthly strata fees in your comparison, as well as the amenities you’re getting.
Advantages of Detached Home Ownership
Maybe you’re dreaming of a single, detached home with a yard, a garage, and a rec room in the basement. Or, a home with a suite that will provide rental income. It’s pretty common in BC to help finance home ownership with rental income. (Just make sure you let your insurance provider know about your tenant/suite to ensure you have the right coverage, and encourage your tenant to carry their own content insurance)
If your favourite pastimes come with lots of equipment, vehicles, tools, or seasonal storage needs, owning a home can offer more space for your ‘toys’.
For some people, home maintenance is an advantage. For those who love to garden, tinker, or smell fresh cut grass, property maintenance is a source of pride, rather than a bother. Some of these activities come with a cost – lawnmowers, snow shovels, earth and seeds, paint, etc.
Owning a detached home will typically give you a greater feeling of separation – a little more space between neighbours, a little more independence to make it your own, a little more distance from hustle and bustle. Humans are social animals, so look at the whole neighbourhood and the community – not just the rooms in the house.
One More Option
And then, there’s an in-between: the Townhouse. Townhouses are usually priced between a condo and a detached family home. Typically, a townhome comes with strata fees – and the amenities those pay for, space to park a vehicle (or more), and some room outdoors, without a lot of maintenance. You can still lock the door and go, and still enjoy some added space and storage.
The very first step of home ownership is knowing exactly what you can afford. And that’s when you can turn to your friendly, neighbourhood Mobile Mortgage Specialist at Interior Savings Credit Union. Find us here, and let’s get you pre-approved today!