Condos are a fantastic choice for low-level maintenance living. You'll have the room to do as you please, but without the hassle and added expenses that come with maintaining a household.
And just like a regular home, you have to put in the hard yards to save the money for it.
How do you go about doing that? With these five essential tips that can help you save money when buying your first condo.
1. Buy Near an Up-And-Coming Neighbourhood
Unless you have the money to buy in a fist-pumping, high-valued area, in most cases, you'll have to settle for the next best thing. But that doesn't mean you can't make the most out of the opportunity.
Investing in up and coming areas near a hot neighbourhood can be a wise investment. Here's why it's such a good idea:
You'll save 20 to 30% of the purchase price (leaving you with more money to spend on fixing up or renovating the condo, if you're allowed to).
You'll experience faster appreciation rates, as the neighbourhood's popularity and quality will continue to increase over the coming years.
So when the opportunity presents itself, look for condos in newly renovated areas that will see your investment opportunity grow. How to achieve this result?
Do your research into areas and what is coming up in the future. Look at local councils and city plans to gain an understanding of the developments occurring in the area. This can further insight into if people are interested in the area or not.
Secondly, speak to your local real estate agents. They'll give you reliable information about which areas will improve in the future.
2. Used An Experienced Local Real Estate Agent
Receiving help from a leading real estate agent within the area you're interested in can be a blessing for your search.
For example, if you live in Edmonton, Canada or near Camrose, then having local powerhouse Camrose realtors with knowledge of the surrounding area and market assisting you can lead to better results for your condo hunt.
They will handle all the search, buying process and contract negotiations to ensure that you get the best possible solution for your mortgage. A local real estate agent will negotiate various things in the contract to protect you, save you the money you may never even heard of, and reduce any potential problems in the future.
You won't even have to worry about paying fees, as in most situations, the realtors will take a cut of the seller's percentage. As a buyer, you have nothing to worry about.
3. Get Loan Quotes from Multiple Lenders
The type of mortgage you'll get will vary from lender to lender. There are different levels of credit, various interest rates and deals, a wealth of extra fees (such as processing a mortgage, loan origination fee, and loan application fee) and so forth. So it's recommended that you get loan quotes from at least four to five lenders.
Why the need for so much?
So you have all your options laid out in front of you. You can crunch the numbers and see what the best choice for your investment is. You'll also have a way to negotiate a better deal with other banks.
You use these loan quotes to help you negotiate lower fees and rates, as let's face it, banks are competing with each other and will try to get you on their side when possible. You now have the upper hand in negotiation for your condo.
4. Increase Your Credit Score
Let's get straight to it: the higher your credit score, the cheaper your loan will be. Regardless of what fees banks might charge you, you'll get better deals if you have a better credit rating.
Improving your credit score is simple: just pay off your debt in a consistent manner (particularly credit cards, as they got some high-interest rates and fees).
You should also avoid taking up new loans until you're ready for the mortgage. You don't want more debt on debt. And finally, try to keep your balances below 15% of your credit limits to maximize your credit score.
Not only will this save you money for buying your condo, but it will reduce the fees, rates and costs in the future, thereby generating more money in your pocket.
5. Shop Around for Valuable Home Insurance
Your condo is still a house - regardless of what anyone tells you. That means you still got to find insurance for it.
Just like regular home insurance, condo insurance follows the same vein: you'll get coverage for everything inside your apartment, including personal belongings, interior (and in some cases, exterior) upgrades or improvements, loss assessments, personal liability and other additional expenses.
And like regular insurance, such as auto or life, you have to shop around and compare the deals on offer to you. Just like when gathering various home loans, you have to do the same with the insurance: gather four to five different options and compare to see what's best for you.
Finding the right home insurance can save you money in the long-term, reducing your current expenditure and saving you more money for your mortgage.