May 7, 2013
First timers: Wary and web savvy
It’s a given that younger generations are very much web savvy. Doing everyday tasks like ordering coffee, paying bills, restaurant reservations and getting directions is second nature to them. But how does this factor in when purchasing a home? Knowledge is power. An article by Adam Mayers, personal finance editor outlines just how much younger generations and first time homebuyers look to the Internet for research.
One very major point that Mayers makes is that young first timers are taking on the most risk: they don’t usually have the most to put down in terms of down payment, usually get shafted with the highest ratio mortgages and are more sensitive to mortgage rate increases. As such, these younger first time home hunters naturally go online for research to look for the best value.
The numbers don’t lie: Wary and web savvy
A study by Canada Mortgage and Housing Corp. shows the following interesting facts: first time buyers look to their friends akin to how their parents look to professionals for advice and 20% use social media in their search with Facebook topping the list.
Generation gaps have different views about how helpful banks really are. Older generations think of banks as one stop shops that provide financial services in bundles but younger generations are not so trusting. The numbers don’t lie for this fact: about 30% of younger first time home buyers are financing through brokers which is up 23% from two years ago.
Do your numbers add up?
Attention first time home buyers! As much as you think you’re prepared for the financial costs in purchasing a home, always budget a little more. Something always comes up, whether that be a closing cost, unforeseen legal costs or extra renovations. Check out this article on our site that outlines basic mortgage payments and other costs you should factor in when financing your home purchase. Excerpt below.
You know how much you have to spend, but not all of it can go towards the purchase price of your new home. Some of it will be used to over costs associated with buying and moving into a home.
Other upfront costs to consider:
- Deposit: up to 5% of the purchase price, made when you make an offer to purchase.
- Home Inspection Fee: generally $500.
- Prepaid Property Taxes and/or Utility Bills: to reimburse the vendor for prepaid costs such as property taxes, filling the oil tank, etc.
- Property Insurance: covers the cost of replacing your home and its contents. Property insurance must be paid in place on closing day.
- Survey or Certificate of Location Cost: $1,000 to $2,000 range.
- Legal Fees and Disbursements: must be paid upon closing. Minimum of $500.
- Land Registry Fees: a percentage of the property’s purchase price. Check with your lawyer/notary to find out the current rates.
- Property Appraisal Fee: between $250 and $350.
- Moving Expenses.
- Furniture, etc.