5 Things You Need to Know Before Making an Offer on a Condo in Canada
Buying a condo is a lot different than buying a single-family home. Rather than owning property yourself, you own the inside of your unit, but collectively own all common areas with the other owners.
Before you make an offer on a condo, there are five important factors you should understand to make sure it’s the best investment for you.
Negotiate the Best Mortgage Rate
Before you buy a condo, make sure you have mortgage pre-approval. Once you apply for a mortgage and get approval from a lender, you know you personally qualify for the loan. All that’s left is finding a condo that meets the lender’s guidelines, which for condos can be a little more difficult.
Because condos pose a higher risk of default, lenders often charge higher interest rates. Before you shop for the perfect condo, negotiate the best mortgage rates with your lender. This works best if you have good credit, a low debt ratio, and a stable income.
Consider Resale Value
Most people buy a condo for a short while. Whether it’s your first home or you’re downsizing after the kids moved away, most people stay in condos for a few years. This makes resale value an important factor. Focus on location, demand for condos in the area, and the association’s reputation before buying a condo.
Know the Association Fees and What’s Included
When you invest in a condo, you must follow the association’s rules and pay their fees. Don’t assume each association is created equal. Find out the fees, ask about special assessments, and inquire about what’s included in the fees.
Do Your Research On The Management Company
The management company can make or break your time in the condo. If they are unresponsive, difficult to deal with, or don’t keep the property maintained, you could find yourself frustrated often.
Do your research on the management company finding out how they handle issues, how well they maintain properties, and how strict they are with the rules they set. Remember, you have less freedom in a condo than you do a single-family home.
Use your RRSP To Fund Your Down Payment
Under the Home Buyer’s Plan, you can withdraw up to $35,000 for a home down payment. The kicker is the money must be on deposit for at least 90 days for you to avoid penalties. You must also sign an agreement that you’re using the funds to build or buy an existing home.
It’s important to have the right online brokerage to ensure you get the best service, the rate of return you hoped for, and pay the lowest fees.
Buying a condo can be exciting as long as you do your research and the legwork. Shop mortgage rates to get the best mortgage, invest your money in the right RRSP so you have funds for a down payment, and know what you’re getting into as far as the condo’s location, association, and its costs.