Once you've saved up for a down payment, it’s easy to get excited about buying your first condo. Unfortunately, this excitement can lead to homebuyer's remorse if you don't weigh your options.
Take some time to do your research before you make this important decision. When you know exactly what you’re getting yourself into, you’re more likely to make good choices - ensuring you'll be happy in your new home for years to come!
1. Mortgage Pre-Approval
Talk to a lender about getting a mortgage pre-approval. This requires a formal application, a credit check, and proof of your income. The good news is it gives you an idea of how much the bank will loan you and what type of interest rate you’ll get. Using this info, you can start running some calculations to see how much you’ll pay on a monthly basis.
2. Proper Budgeting
It’s important to purchase a place that’s affordable for you. Some first-time home buyers make the mistake of underestimating the monthly costs. Your mortgage, for instance, will include payments that go toward the principal balance, the interest, your property taxes, and your homeowners’ insurance. On top of that, condo owners must pay a monthly maintenance fee. This fee varies from community to community, and usually depends on the types of amenities the property has to offer and the size of the condo.
In addition to this, you’ll want to be able to put some money into an emergency fund. You’ll use this to pay for any repairs inside your condo or if a “special assessment” is levied against the condo residents. The special assessment is an extra fee you have to pay when there’s a major, unexpected expense needing to be made on the property. These unexpected expenses are less likely to occur in brand-new condos in new communities.
3. Start Your Research Online
Builders are putting their best foot forwards when they create the show homes, and it’s easy to get starry-eyed as you look at all of the features that could be yours. Sometimes, this means you find yourself attracted to something that looks good, even though the quality isn’t there.
For this reason, it’s best to start your research online. Look at some of the most popular communities in Edmonton, determine which amenities are in the area, and estimate what your commute might look like. Review different builders, looking at both cost and quality. Once you have narrowed down your choices through this process, you’re ready to visit the show homes.
4. Understand Your Financial Responsibilities
When you’re building new, you’re often taking the money out in stages, which means your payments can fluctuate. It can also mean you’re starting to make payments on a home you can’t live in yet. If you have a sizable amount saved up, you can usually start by submitting only the down payment, allowing the additional money to earn interest until the condo is ready and you have to take out the full mortgage. Ask your lender if you’re not sure about the process.
5. Ask About the Building Timeline
If you purchase a resale condo, you’ll probably be able to move in after a month or two. Those who want to build may have to wait longer, and it can be hard to manage this with your apartment lease. A good builder will let you know exactly what to expect during the home building process . If you’re pressed for time, look into quick possession condos that are move-in ready or near completion.
6. Look at the Community Rules
Condo communities have their own set of bylaws governing use of the property. The rules might prevent you from parking your bike outside your door, hanging your holiday decorations up outside, or playing your music late at night. Some people find these types of rules to be a bit restrictive, and this can definitely turn your new place into a negative experience. Reading a community’s rules should be a critical part of the decision process.
7. Choose a Good Builder
If you’ve decided you want to build a brand-new condo, be sure to choose a great builder. Consider how long the company has been in business, and ask to speak with references. When considering a new community, look at the ultimate plan for the community to be sure you like the direction it’s headed.
8. Think About the Future
While you might not be planning to live in your condo forever, you don’t want to purchase a condo you’ll outgrow in just a year or two. Rather than selecting a studio or one-bedroom condo, look for condos that have two bedrooms or more. This arrangement could allow you to have a roommate, a guest bedroom, or a nursery for a baby. Condos with at least two bedrooms are also more attractive to buyers, which is an important consideration for when it’s time to move on.
You know your personal situation best, so it’s important to think carefully about the type of condo that’s best for you. Take the time to research and consider all of your options, and you’ll be sure to make the right decision.