Affordable Homes for Sale in Lake Of Bays — Page 6

Buying an Affordable Home in Lake Of Bays

Finding a lower-priced home is only the first part of keeping homeownership affordable. The monthly carrying costs, condition of the property, cash needed at closing and repairs that may follow after possession can materially change the real cost of a purchase.

Compare the Monthly Cost, Not Just the Asking Price

Two homes with similar asking prices can have very different monthly costs. A useful comparison should look beyond the mortgage payment and include the expenses that come with the particular form of ownership.

Freehold or Condo: Which Can Give You Better Value?

A condo can make ownership accessible at a lower purchase price, but the maintenance fee matters. Check what the fee actually covers and whether major utilities, parking, a locker or other services are included.

A freehold home normally gives the owner more direct control over the property, but it also transfers more repair and maintenance responsibility to the owner. When the budget is tight, compare the predictable monthly condo fee with the less predictable repair costs of a freehold property rather than comparing purchase prices alone.

Keep Cash Available Beyond the Down Payment

The down payment is only one part of the cash required to complete a home purchase. Depending on the transaction, buyers may also need money for:

• the deposit submitted with an accepted offer;
• legal fees and disbursements;
• land transfer tax;
• title insurance;
• a home inspection;
• an appraisal where the lender requires one;
• property-tax or other closing adjustments;
• moving expenses; and
• repairs, appliances or other costs soon after possession.

A Mortgage Pre-Approval Is Not a Spending Target

A lender's pre-approval can help establish a financing range, but a household may decide that a lower purchase price is more comfortable. Childcare, transportation, debt payments, groceries, savings goals, travel, future repairs and other family expenses do not disappear after the home closes.

Leaving room in the monthly budget can also make it easier to handle changes in mortgage rates or unexpected property expenses without making every other household expense dependent on the mortgage payment.

Lower Price Does Not Always Mean Lower Cost

A lower-priced resale home may be a good opportunity, but the price can also reflect work that the next owner will need to complete. Before making an offer, pay particular attention to major-cost items such as:

• roof age and condition;
• foundation, grading, drainage and signs of water entry;
• furnace, air conditioner and water-heating equipment;
• windows and exterior doors;
• electrical and plumbing systems;
• basement condition;
• major renovations and available permits; and
• appliances or other items likely to require early replacement.

A qualified home inspection can help a buyer understand the visible condition of the property. Legal, zoning, permit, structural or other specialized questions may require the appropriate outside professional.

Buying an Affordable Condo? Review the Status Certificate

With a resale condominium, affordability depends on more than the unit's asking price. The status certificate and supporting condominium documents can provide important information about common expenses, the corporation's finances, reserve-fund planning, rules, insurance, arrears, legal matters and other corporation-level issues.

Buyers should have the current condominium documents reviewed for the specific property. A low purchase price can be less attractive if the ongoing fee is high or if significant corporation-level costs may affect owners later.

First-Time Buyers May Have Additional Options

Eligible first-time buyers may be able to use programs such as the First Home Savings Account, the federal Home Buyers' Plan and Ontario's first-time homebuyer land-transfer-tax refund. These programs can affect how a buyer saves for a purchase or the amount of cash needed at closing, but eligibility, contribution or withdrawal limits and other rules can change, so the current government requirements should be checked before relying on a program.

Should You Choose the Cheapest Home?

Not necessarily. A slightly more expensive property can sometimes be the better long-term fit if it has fewer immediate repairs, lower ongoing fees, more usable space, needed parking or a layout that avoids another move in the near future.

When the budget is limited, accepting cosmetic imperfections can sometimes preserve money for the features that are expensive or impossible to change.