How are you going to pay?

Photo by Michael Longmire

This is a question that most people consider before spending money on a purchase such as buying groceries, a vehicle or even shoes.  Surprisingly, this is a question that many seldom think about when considering one of the most expensive purchases in their lifetime… buying a property!  

Many people will start looking at homes before they have even considered the most important question – how are you going to pay?

In Calgary, we are currently experiencing a market with low listing inventory. Some Buyers are competing for properties and offering above list price. Many homes are selling quickly. In order to compete, Buyers must know their options and have financing arranged before making an offer.  

If you are planning on using the equity from your current home to purchase your next one, you need to understand your options. Just because you already own a property, that does not mean your financial situation will allow you to automatically qualify for a new mortgage, line of credit, port your existing mortgage, or qualify for bridge financing. Your income and debt might have changed in recent years. It takes time to arrange financing. It is not as easy as it used to be. In today’s market it is unlikely that a Seller will accept an offer conditional to a Buyer’s home selling. You need to be prepared with a plan for buying and know the price range that will suit your lifestyle. 

Our housing needs change as we get older. Obtaining professional advice from a trusted source is important for those in their retirement years. Your financial advisor will be able to advise you on an affordable price range to purchase your next home, advise you on financing options, and help you to arrange and have a strategy in place for paying. Sometimes it is good to get a second opinion. Financial institutions may have different qualifying criteria and options suited to your personal situation.  

An experienced, licensed Real Estate Agent will be able to discuss the current market conditions, provide you with an evaluation on your current home, review expenses and help determine the amount of equity you have. This information will assist you when meeting with your financial advisor.  

When you have a plan in place, and know what you can afford and how you are going to pay, you will be ready to start researching your housing options. Moving can be overwhelming, but with a little planning, it can be an exciting time!