In my opinion, of course…
1. The self-employed game is now played on a much different field than the one your self-employed parent(s) used to play on. If you are self-employed and buying a home is in your future, talk to a professional as soon as possible to ensure you are taking the proper steps to both maximize your tax savings, and be able to qualify for a mortgage at the same time.
2. No credit is bad credit. Some people think that paying cash for everything is the way to go. While their ability to avoid paying interest on anything is applauded, it doesn’t help them when it comes time to buying a home. Lenders want to see the history of your ability to repay loans and trade lines. This doesn’t necessarily mean borrowing money. Filling up your tank of gas with your Visa once a month and paying it off in full will not incur any interest charges and it will begin a record that reports to your credit bureau, helping you gain the positive credit score that is so highly regarded in the finance world.
3. Your condo might not be the perfect short term solution you are hoping for. With condo values in most cities seeing very little (if any) appreciation over the last 5 years, buying that first condo with 5% down with the hopes of selling and moving into something bigger in the next few years, might not be your most cost-efficient option. When it comes time to sell, a large majority of your initial 5% investment will be eaten up by CMHC fees and Realtor fees. This leaves many hopeful second time buyers with barely enough equity left from the sale to cover the legal fees on their next purchase.
4. Know what your costs are (on buying and selling) before you enter in to an agreement. This could cover a very wide array of subjects. As mentioned above, if selling in the near future is your plan, know what your selling costs will be before you enter in to your purchase agreement. When it comes to your mortgage, know what the cost to pay out your mortgage will be and know your options on portability, assumability, and early payout before you get googly eyed about the rate.
5. The old adage of “you get what you pay for” still usually rings true. Too many times I have heard clients complain about the Realtor that they ended up choosing because he or she was willing to discount their commissions in order to work with them. The same thing often happens when clients choose the absolute lowest rate they could find when shopping for their mortgage, only to find out later that there is no way out of this mortgage unless they sell their home. Often times the best professionals will tell you what questions you should be asking throughout the process. Know who these professionals are by asking for reviews and testimonials from your friends and family who have gone through the same process before.