05-30-2006, 07:02 PM
Mortgages in the U.S. typically run for 30 years and Iâll assume that it is the same in Canada.
With that in mind, you might want to consider a 15-year mortgage. The interest rate will be slightly lower and because you are paying down the principle quicker, this will result in a dramatic reduction in the total amount of interest you pay. For instance, a $175,000 mortgage at 7% interest will have a monthly payment of $400 more per month; yet will save roughly $60,000 over the course of the loan. Also, you will build up equity in your home at faster rate, which is good if you decide to sell the house in a few years. (Play around with the mortgage calculators to see the difference.)
Also consider buying a home that is in below average condition. Around here, one can find homes needing only paint and floor coverings selling from 10 to 30 percent below market value. This is a way to gain âinstantâ equity in the home.
As was mentioned, get a home inspection.
See if a home warranty is available.
Check whether or not the home is in a flood hazard area.
Have a realtor run CMAs (Comparative Market Analysis) of the area for the past three or four years and see if property values are increasing. Stay away from areas that show declining values and be wary of stable values as well.
ZR
With that in mind, you might want to consider a 15-year mortgage. The interest rate will be slightly lower and because you are paying down the principle quicker, this will result in a dramatic reduction in the total amount of interest you pay. For instance, a $175,000 mortgage at 7% interest will have a monthly payment of $400 more per month; yet will save roughly $60,000 over the course of the loan. Also, you will build up equity in your home at faster rate, which is good if you decide to sell the house in a few years. (Play around with the mortgage calculators to see the difference.)
Also consider buying a home that is in below average condition. Around here, one can find homes needing only paint and floor coverings selling from 10 to 30 percent below market value. This is a way to gain âinstantâ equity in the home.
As was mentioned, get a home inspection.
See if a home warranty is available.
Check whether or not the home is in a flood hazard area.
Have a realtor run CMAs (Comparative Market Analysis) of the area for the past three or four years and see if property values are increasing. Stay away from areas that show declining values and be wary of stable values as well.
ZR
"Nothing unreal exists."
-- Kiri-kin-tha
-- Kiri-kin-tha