My new first-time homebuyer clients, let’s call them Peter and Krista to hide their identities, are a young local couple in their 20s who came to me last month looking to get pre-approved for a mortgage to buy their dream condo in Metro Vancouver. They both just completed their probation period in their new dream jobs, earn a great annual income of $90,000 between them, and saved $20,000 or 5% down payment towards their condo.
BC First-Time Home Buyer Loan
At a 5-year fixed-rate of 3.39%, they qualified for a mortgage amount of $405,000 plus their $20,000 down payment, giving them $425,000 to purchase with. The estimated monthly principal and interest payment (not including property taxes and strata fees) would be approximately $1,900. Peter and Krista immediately got a recommended realtor on their side to help navigate Vancouver’s irrational exuberance condo market.
In this heated condo market, Peter and Krista were eager to find their dream condo fast and began looking on Realtor.ca along with any listing their real estate agent sent them and began scheduling private viewings mid-week and open houses at the weekend. They immediately fell in love with a cozy condo in the Joyce-Collingwood area for sale for $399,000 and decided to put an offer in at $11,000 over asking subject to financing and a home inspection. Unfortunately, they were competing with 17 other would-be homebuyers and the condo, unfortunately, sold $76,000 over asking with no subjects attached.
They didn’t give up hope and got back out into the market. A week later they came across a nearly new condo in Port Coquitlam for sale for $359,000 and decided to put an offer in at $410,000, $51,000 over asking and subject to financing only as the unit was still under warranty. Unfortunately, the condo sold for $425,000, $66,000 over asking. This time, 14 other offers were also on the table.
Alternative Mortgage Financing
A little discouraged, Peter, Krista and I regrouped to discuss alternative mortgage options. My first piece of advice to them was to take their time finding their dream home. What’s the rush? My second piece of advice was to think long-term. Do you see yourself living in Metro Vancouver in the next five to ten years? If not, an out of province condo or house might be their best option. Thirdly, co-signing a mortgage with a trusted relative or friend will help if you’re not a strong enough applicant on your own and you need someone else who has a better track record to support your application.
Peter and Krista continue to search for their dream home in Metro Vancouver whilst keeping a luxury out of province condo as a second home in the back of their minds. We will keep you updated on how our new clients get on finding their dream home. If you are in the same boat as Peter and Krista and are slightly out of reach of your dream home in your dream location, don’t worry, we have many outside the box mortgage options to turn your dreams into reality. Contact us today to learn how to get pre-approved for a mortgage to begin shopping the Vancouver’s real-estate marketplace.
