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Resourceful ways to buy your first home

Blog by Kim Twohey | May 30th, 2016


It is no secret that housing prices are on the rise around the country.  While the Calgary residential real estate market has cooled somewhat this year, house prices are still significant.  Homeownership can feel out of reach for many Buyers who are ready to take on the responsibility of owning a home.  There are a few creative ways that Buyers can purchase a home without waiting years to save for a down payment or ending up house poor. 

A family loan

In some instances, it makes sense for first-time Buyers to borrow from parents or grandparents.  If a Buyer has recently paid off all their debt but does not want to wait another few years to save for a down payment, borrowing from a family member can be a good option.  A family member can be more flexible with the terms of the repayment and the interest rate.  Just like a bank loan, it is imperative that all the terms of the loan are fully understood by each party and documented in writing. 

Shared purchase

Do you have siblings, cousins, or even parents that you would not mind sharing a house with?  What about a trustworthy friend?  Shared ownership can be an excellent strategy since the financial burden is spread across two or more people.  A shared purchase must be accompanied by a written agreement that details each person’s rights and responsibilities.  The written agreement should include details on each person’s financial investment into the property and outline a plan for selling the property. 

Investment property

Many first-time homeowners have enjoyed financial success by purchasing a property that is also an investment.  You can purchase a property that will be solely tenant occupied or purchase a property that is both owner and tenant occupied.  This provides homeowners with tenant generated income that can be put towards the mortgage.  While this option can be very successful, it is important that Buyers understand their responsibilities as a Landlord and the additional costs associated with owning an investment property.

Rent to own

The rent to own option for purchasing a house is often overlooked but can be a very successful choice for some Buyers.  A rent to own agreement is a lease that includes the option to purchase the home within a specified period of time.  This is a good option for Buyers who have poor credit or who do not meet the minimum length of employment required by many traditional lenders.  The purchase price is agreed upon at the time the lease is negotiated.  Lease lengths are typically between 1 to 3 years, which gives Buyers time to improve their credit scores, lengthen their employment history, and save for their down payment.  The rent to own option is protected against market fluctuations since the purchase price is agreed upon in the lease.  This can be a very attractive option in markets where house prices are consistently increasing.

The best way to learn more about purchasing your first home is to connect with an experienced Realtor who listens to you and takes the time to understand your financial situation as well as your goals.  If you have questions about buying your first home, please call me!