2. 1.Stick with a fixed-rate mortgage. Recent data
shows that adjustable rate mortgages, or ARMs, are
increasingly popular, rising from 9 percent of the
mortgage market in the fourth quarter of 2010 to
12 percent in the first quarter of this year. This
might seem crazy to some, but in financially
aggressive crowds, the lure of low, 3 percent(ish)
interest rates on ARMs is enough to overcome any
qualms. As well, today's ARMs tend to have lower
lifetime interest rate caps and require payment of
principal, so they don't adjust as violently as the
subprime interest-only and option ARMs that
contributed to the foreclosure crisis.
3. 2. Put and keep a home warranty in place. One
of the most frightening things about going from
renter to homeowner is the prospect of being
solely responsible for the care and feeding of
your home and all its systems and appliances.
Responsibility for both the costs and the actual
logistics of repairing things like a leaky roof, a
broken hot water heater or a haywire electrical
fixture looms large in the minds of first-time
buyers, in particular.
4. 3.Get repair bids and estimates, not just
inspections. After you find the home of your
dreams (or the home of your budget!) and get into
contract, you'll have a contingency or objection
period ranging from 7 to 17 days during which you
can obtain all the inspections you want. Most
buyers start out with a general property inspection,
a pest inspection and a roof inspection, then get
more specialized inspections if the property calls
from it. Pest and roof inspectors will generally
provide an inspection report AND a repair bid for
any work they find needs to be done.
5. 4. Buy on the 10-year plan. Warren Buffett
once famously advised stock investors to "only
buy something that you'd be perfectly happy to
hold if the market shut down for 10 years." The
same advice is good for buying a home in
today's real estate market. Take on a mortgage
you know you can sustain, buy at a price you can
comfortably afford and avoid having to sell
because you need to move for some urgent
reason, or because the home no longer meets
your needs.
6. Randy Bett
Investment Realtor/Author/Investor
Real Estate Professionals Inc.
Better Group Real Estate
202-5403 Crowchild Trail NW
Calgary, AB T3B 4Z1
Phone:403-774-7464 Ext:1
Fax:403-208-0082
Toll Free fax:888-711-6801
