Save Your Sanity, Be Realistic

A common pitfall for new home buyers is that they expect to spend a certain amount on a home based solely on their income. But before even thinking about using a mortgage calculator, you should put your household finances under the microscope. If you really want to know your incoming and outgoing expenses, then keep track of everything – including any current debt – for a couple of months. It can be tedious, but it’s the only way to know what numbers you should type into a mortgage affordability calculator. 

You’ll also need to tack on a little extra for typical home maintenance, which can be anywhere from 1-5% of the value of your home, depending on who you ask. But given that most big home repairs such as a roof or furnace have long life spans, some years you’ll spend more than others. Other often-overlooked costs are property taxes, which tend to increase over time. 

Once you have an accurate expectation of what you can afford, you can speak with a mortgage professional and get a preapproval from a lender. Don’t let the preapproval amount dictate your budget! First of all, it’s not set in stone, and secondly, lenders don’t take into account other expenses that you may have, such as childcare, transportation costs, or long-term savings plans so the amount that you’re preapproved for may be larger than you expected. Stick to what you know you can afford. 

When it comes to the Grand Forks and Christina Lake housing market, don’t expect it to be something that it’s not. You’re not going to get a Spanish-style home here and you probably won’t get a newly-renovated 4-bedroom, 2-bathroom house with a $70,000 budget. 

The best way to combat this is to be open-minded when your realtor shows you property in your area that fits your personality and financial situation. A home might check all of your boxes but still not be what you want, or perhaps it won’t check any of your boxes and you’ll fall in love with it. You won’t know until you look start looking at properties and comparable sales. Your priorities could also change during your house hunt and things such as the quality of a school district or proximity to streets might become more (or less) important to you. 

Learning the housing market will not only help you manage your expectations for what you might get in a home, but also for the fair market value of the property, and what you’ll need to pay to make it yours. You’ve probably heard it before that home buyers – particularly first-time home buyers – rarely get everything that they want when it comes to buying property. If you go into the process with realistic expectations, however, you’ll avoid an emotional roller coaster ride.