I often hear people say they would love to buy a new home but cannot afford it. That may be true in some cases, but I wonder whether they have considered a condominium. If you have eliminated owning a home because of financial reasons, perhaps it is worth a second look. Among a multitude of lifestyle benefits, condominiums offer price points that bring owning into the realm of first-time buyers. For many residents of the GTA, this is how they enter the new home market.
I understand that price point is only one factor in buying. What holds back many people is the down payment, which I agree can be an obstacle. Today, however, many developers are offering special deposit payment plans that spread out this cost over months to make it easier. It is always worth asking about this possibility, as well as capped mortgage interest rates.
When it comes to the big picture, first-time condo buyers often find they can carry their new home for monthly payments that are the same, slightly more, or even less than they were paying in rent. The big difference is that now they are earning equity. Single professionals, young couples, and even roommates who pool their resources are buying condos to start earning equity and set themselves up for a bright future.
If you are thinking that condos are for empty-nesters or business-obsessed professionals, remember that young people are frantically busy these days, too. Many younger buyers are not interested in using their spare time for upkeep on a low-rise home. Today’s compact suites are so well designed that they live larger than their square footages. Plus, suite owners can still entertain friends in the building’s theatre, party room, billiards room, rooftop garden, etc. Of course, condominiums are usually close to public transportation, and many are in the hub of downtown Toronto, which may mean a quicker work commute for professionals. Some may even be able to walk to work, which is amazingly convenient.
When it comes to financial reasons to buy your first condo suite, if you are a parent with a grown child attending university in the GTA, you may find that it is economical to have them live in a condo and then sell your unit at a profit in a few years. Whatever your life circumstances, if you think you cannot afford to buy a new home, it may be well worth your time to reconsider. Sit down with a mortgage broker or a mortgage specialist from your bank, and have that professional do the paperwork to get you pre-approved for a mortgage. And if you have never purchased a home before, remember that there will be closing costs above and beyond your deposit. Ask about those and the maintenance fees you will pay as a condominium resident. Arm yourself with as much information as possible before you make the statement that you cannot afford a new home. Fact, is maybe you can!