New or in need of repair? Homebuyers split
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10/03/2011 5:00:00 PM
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When it comes to buying a new house or a fixer-upper Canadians are split about which to purchase, according to a report from TD Canada.
According to the 2011 TD Canada Trust Home Buyers Report, Canadians are divided about looking for brand-new homes that won’t need any work or fixer-uppers that they can renovate to suit their needs, with men and women sitting on opposite sides of the fence.
Half of Canadians would prefer a new home because everything will work perfectly (25 per cent) and it hasn’t been lived in before (24 per cent), while the other half prefer older homes, which they feel offer better quality (34 per cent) or have more character (17 per cent). The report found that men are more likely than women to prefer a fixer-upper because it is more affordable (14 versus eight per cent) and because they can renovate to their taste (37 versus 29 per cent).
Speaking with MortgageBrokerNews.ca, Sandra Lastovic, an agent and owner with The Mortgage Centre in Guelph said in her region (Kitchener/Waterloo/Cambridge), it’s hard to find a detached home in great shape for under $250,000; however, this price range appeals to many first-time homebuyers.
“I’ve found that first-time home buyers often struggle to come up with a good down payment for a home purchase,” she said. “If you are buying an older home that also needs renovations, it can push a first-time home buyer’s budget over the limit.”
She suggested that first-time homebuyers, who are purchasing with less than 20 per cent down and want to buy a home in an older neighbourhood should consider a “purchase-plus improvement mortgage.”
“It’s a great and easy way to wrap simple kitchen and bathroom renovations into a home that also easily increase its value, said Lastovic. “One benefit of considering this mortgage strategy is that more money can go towards the down payment, instead of having to pay for up-front renovation costs.”
Farhaneh Haque, Regional Manager, Mobile Mortgage Specialists, TD Canada Trust counsels that purchasers need to understand the costs associated with buying a home that need some work. While it can give buyers the ability to transform the space into their dream home, the costs of upgrades need to be taken into consideration when deciding on the price range for a home.
In the report, Canadians say the most important consideration when buying a home is cost (97 per cent). Women are more likely to say this is a very important consideration (82 per cent versus 70 per cent of men). Other important factors are features of the home (94 per cent), size (93 per cent), security and safety (92 per cent) and location (91 per cent).
“Canadians wisely say that that cost is the number one consideration for a home purchase, evidence that Canadians realize that in order to truly be comfortable in their home, they need to comfortably be able to afford it,” said Haque.