Parade of Homes featuring the best of new homes in Manitoba, Canada
Issue link: http://publications.winnipegfreepress.com/i/1492837
SAVE FOR A HIGHER DOWN PAYMENT AND YOU'LL SAVE ON THE COST OF INSURANCE PREMIUMS AND INTEREST. Chances are, you'll be motivated to make plans for your own dream home. Go for it, but start by doing some homework. You'll need to understand mortgage basics — the difference between variable and fixed-rate mortgages, stress-testing against rising interest rates, mortgage loan insurance, repayment terms and so on. MoneySmart Manitoba and Canada Mortgage and Housing Corporation (CMHC) each provide a wealth of practical information to help walk you through the entire home-buying process, from saving for a down payment to budgeting for property taxes and home maintenance. MoneySmart Manitoba (moneysmartmanitoba.ca) is particularly user-friendly for young adults who face financial challenges that are unique to their generation. Its podcasts, blog and information links are aimed at increasing financial literacy across the board. Experts address everything from basic budgeting to mortgages and investments, cryptocurrency and long-term planning. CMHC (cmhc-schl.gc.ca) covers the waterfront on housing, with guides to buying condominiums and single-family homes, mortgage and affordability calculators and advice for newcomers and first-time buyers. There are also tips for managing payments and planning for changes in your financial situation. Guides help to determine if you are financially ready to buy a home. Analyzing your current expenses will give you a good idea of how much you can afford to spend. Your housing costs — mortgage principal and interest, taxes and heat — should not be more than 39% of your gross annual income, and your total debt load should be no more than 44% of your gross income. While it is possible to buy a starter home with a down payment of 5%, mortgage loan insurance applies to mortgages with a down payment of less than 20%. Save for a higher down payment and you'll save on the cost of insurance premiums and interest. Get pre-approved for a mortgage before you go house shopping, and don't be tempted by homes out of your price range. Instead, try to underspend — along with costs for legal fees, land-transfer tax, home insurance, utilities and property tax, it's a good idea to have a contingency fund for unexpected expenses. Now for the fun part. Think about what you want in a home today, and what you might need five or 10 years from now. There are several factors to consider, including: • LOCATION: Do you want to live downtown or in the country? Close to schools, or within walking distance of restaurants and nightlife? Do you want to walk or bike to work? • SIZE: Do you need a home office? A nursery? Extra bedrooms? It's more cost-effective to build on a larger footprint upfront than it is to build an addition later. • SPECIAL FEATURES: Do you want a big yard with a swimming pool, or a smaller, low-maintenance space? Do you want a visitable home, or accessible features for aging in place? If you have older children, or elderly parents, you might want to plan for a secondary suite — an add-on that could also boost your income in the immediate future. Parade of Homes SPRING 2023 45