Talk With Your Bank
The first step to buying any home is to determine your budget. Make an appointment at your financial institution BEFORE you set your sights on a particular house. The bank will look at your income and current monthly debt load to come up with a ballpark figure on what you can afford.
In Canada, if you are planning on putting down less than 20% of the value of your home, an insured mortgage will be required. The rules for qualifying have recently changed, but your bank will have the up-to-date details. Also remember that banks will consider land that you own as part of your equity.
Share Your Budget
When you’ve found the perfect builder for your dream home, make it a point to be totally upfront about your maximum budget. Sharing your budget will ultimately save you a lot of time, and will ensure that you are getting the best information you can, relative to your personal situation. Good builders can work within a wide range of budgets, and may be able to suggest areas where you can save money.
Discuss Hidden Costs
Different builders have different inclusions, so don’t forget to find out what items are and are not included in your build. Be sure to be very clear about what the extras are, and what other monies you will need to set aside. Some common items that may come at an additional cost are landscaping, fences, decks, and window coverings. But some builders only estimate costs for certain items like driveways, flooring, kitchen cabinets, etc and if the actual cost comes in higher, you are responsible.
It's always smart to budget extra for unforeseen costs. Having a cushion that doesn’t necessarily need to be spent will make your new home building experience less stressful. (FYI - Prestige Homes prices are guaranteed, so unless you change the scope of your build, there shouldn't be any cost overruns.)
Plan for Resale
New homes offer a wide range of finishes and layouts. It makes sense to consider the resale value of your home when you make those choices. In life, we never know what is around the corner, and even if you think you will never move from your new home, something could come up that changes your situation.
Pick finishes that add value to your home and protect your investment by choosing options that will appeal to a wide variety of buyers. And remember, price is not the only consideration. You want a quality product that will stand the test of time.
Consider a Mortgage Broker
In the past, banks were the only places available to secure mortgage financing. However, recent years have seen the growth of independent mortgage brokers.
These licensed mortgage professionals have access to a wide number of potential lenders with a variety of mortgage rates. They will often be able to get a better rate for you than most banks will, even your own, as they are able to shop around with different banks and get preferential rates and volume discounts - discounts that they pass directly on to you.
Buying a new modular home can be an exciting and creative endeavour that ensures that where you live is a reflection of what you value. The first step on the road to new home ownership begins with the hard work of getting your budget in order. It may not be as fun as the layout and design decisions that come later, but having finances in order will go a long way to making the whole process run smoothly.
Once your budget is established, make sure you have open and honest discussions with your builder from both the angle of what you can afford and what is included. After all, you are partners in making your brand new dream home a reality.
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