Has your financial situation changed since you purchased your current home? Are you making more money, or have you paid off any debts? You might be surprised to learn how much of a mortgage you now qualify for.
Use a few online calculators to determine how much you might qualify for. If it’s not what you expected, don’t be discouraged; these calculators take a very basic account of your financial situation. Speak to a mortgage specialist to get a more detailed glimpse at your current status.
You can also look into any government or financial plans that might be able to add to your new home fund. If you’re planning to build a brand-new home, you can take advantage of the GST New Housing Rebate, which allows you to claim up to $6,300 back on the GST you pay on a new home.
Depending on how much of the mortgage on your current home is paid off, you may also be able to qualify for a Home Equity Line of Credit (HELOC). This can be helpful in all sorts of ways, from contributing to your down payment to consolidating any other debts you may have such as credit cards or car payments that may have a higher interest rate.
Once you know where you stand financially, determine if you’re willing to spend the maximum amount you qualify for. Sometimes it is much better to set your budget lower to ensure you won’t be house poor, or that your payments take up so much of your income that you don’t have any expendable cash for entertainment or even unexpected expenses.
Before you start looking at new home models, make a detailed list of the things you want in your new home. Add things like the number of bedrooms and bathrooms, the type of pantry and closets, other spaces like a loft or formal dining room.
It’s easy to get distracted from your goals as you tour show homes. You can get emotionally attached to a floor plan without realizing it’s missing a couple of key components you decide are deal-breakers. The more organized you are while you’re shopping, the more likely you’ll be able to choose the best floor plan for your family.
Decide on Your Preferred Community
If you have kids, this one might need a little more attention than if you don’t. Are you willing to move your children to a new school district? Will your kids be able to still attend their existing school if you move out of your current area?
If you plan to move them to a new school, do your research on the schools near your preferred new communities. Are they still taking registrations or are they currently full? Before you land on a new area in which to build, you’ll want to consider these things.
If schools are not a deciding factor for you, determine the type of community you want to live in, and how far away or close to work you prefer to be. If you currently commute quite a distance to work, look for a community that shortens your drive. Your life will feel so much less stressful if your time on the road after a long day is just a quick drive home.
Many new communities have premium amenities built in so you don’t need to travel far to get everything you need. Amenities such as restaurants, grocery stores, medical centres, and recreational facilities are commonly developed in newer communities, meaning you can stay within the area of your own neighbourhood for virtually all of your day-to-day needs.
Think About The Future
When upgrading to a new home, it’s tempting to fall into the mindset that bigger is better. While this isn’t always untrue, it can depend on your personal circumstances. If you’re expecting a big raise or promotion, or your family is expanding, then a bigger home will probably suit you. However, if you’re planning to retire soon or if your adult children are getting ready to move out, you may find that the extra space isn’t what you’ll need.
In that case you can opt for a home with less floor space, but spend the money you’ll save on upgrades in other areas. Remember that buying a home is often a commitment, so try to think about not just what you need from a home now, but what you may need a decade or more in the future.
Consider the Timing of Your Build
Do you need your new home by a certain date? Discuss this timeline with your builder to learn if what you need is possible. New home builders can build you a home from scratch, but if you need a home sooner than this timeline permits, browse their selection of quick possession homes that are already under construction and will be available for possession at varying timelines. Some are even move-in ready!
Communication with your builder is key to achieving the new home you expect. Whatever your reasons are for upgrading to a new home, the more you can inform your builder of your goals and needs, the better your experience will be along the way. Be sure to go into this process with an open mind and a sure plan, and you will soon have the new home you’ve been dreaming of.
Originally posted August 4, 2017, updated January 2, 2019.