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Young and ready to buy first home
Brandon Bianchet is about to fulfill a lifelong goal he’s had since he was just a 10-year-old boy in Pitt Meadows – which really wasn’t all that long ago.
Bianchet is now 20 and just qualified for his first mortgage, has built up a respectable down payment and is about to start house hunting.
“It feels amazing,” Bianchet says, describing the first time he met with his realtor to discuss finding his first home. “My hands were actually shaking.”
Bianchet has been saving his pennies and planning this move for a decade, but notes that current low interest rates mean it’s an ideal time to jump into the market. He couldn’t wait any longer.
Apparently, he’s not alone.
Historic low rates for both short- and long-term mortgages are attracting more young people into the market, according to the Greater Vancouver Real Estate board statistics.
And about 800 young people registered for a recent Greater Vancouver Home Buyers Association first-time homeowner seminar.
Almost 40 per cent of those surveyed at the seminar said they were planning to buy within the next year, and 34 per cent of them will make a townhouse or a condominium their first purchase, president Peter Simpson said in a release.
Those same potential buyers see housing prices, down payment and getting approval for a mortgage as the biggest obstacles to purchasing.
“It’s tough being young,” says Bianchet, who works for a local business providing cellular, TV and Internet support. “You have to build up a credit rating.”
For Bianchet, building up a good credit rating has been part of the plan as well. He paid off his car a year ago and now he’s accumulated the cash for his first down payment. He just went through the excruciating wait to be approved for a mortgage. The answer he was waiting for came through last Friday and he was out pounding the pavement on his next days off.
And now he’s already looking ahead to his next home. Within five years he hopes to “be looking to buy a nice little house. That’s the plan,” he says.
His realtor, Darcy McLeod, says he first noticed an increase in young couples taking advantage of the low interest rates. And he’s also seen an increase in single young men and women eager to get into the market. They aren’t waiting to go the traditional route of waiting until they’ve settled into family life before they turn the key on their own home.
“It’s great to see,” he said. “They are smart enough to get into the market or start saving for a down payment.”
While low interest rates were a big catalyst for Bianchet, he also had a couple of role models he says made all the difference. His parents bought land and built a home in their early 20s in Pitt Meadows more than 20 years ago. He credits their example with giving him the belief he could also be mortgage-free in mid-life if he put his mind to it.
“A big part of this is my parents,” he says. “I really made a difference to know that they did it,” he says.
While Bianchet had his great role models to follow, other young buyers can find plenty of help in creating their own. Banks, realtors, websites will offer you ideas on how to get ready to buy that first home.
McLeod suggests getting approval for a mortgage before heading out to those open houses and remembering you’ll need to save for legal fees and taxes.
The best idea for any young home buyer is to be prepared and to learn as much as possible about what you are about to get into. How much can you afford? What are some of the lesser-known costs to buying your first home?
Even something as simple as just what the heck do some of the words thrown around by lawyers and realtor mean: amortization; appraisal; closed mortgage; maturity date.
Canada Mortgage and Housing has a website to get you started on answering those questions.
But there’s no magic solution for getting yourself in the position where you can slap down your money and become an expert on what all those house hunting terms mean.
Just like that 10-year-old Pitt Meadows kid knew a decade ago, saving money for a down payment is the first step.
And for a growing number of young single home buyers, that seems to be the plan.