HOLR Real Estate Advisor TJ Rinomato Shares His Tips For Breaking Into The Market.
Buying your first home is one of the most important lifestyle and investment decisions you will ever make. With prices doubling over the last few years, getting into the housing market seems unattainable for some new homebuyers.
According to TJ Rinomato, President of Country Homes, if you’re equipped with the right information and plan accordingly, it will be a whole lot easier to purchase your first home with confidence.
HOLR: Is it a good time to buy?
T: Absolutely! If you have a desire or dream of owning a home, it’s a great time buy.
The real estate market has been hot for several years resulting in an incredible increase for average home prices across Canada. Since mid-2017, the market has cooled resulting in a 25% decrease in prices. There will probably be another 10% decrease in prices this year, and overall I would say that 2018 through early 2019, will be a buyer’s market.
It’s important to understand real estate is always a sound investment over the long term. More importantly, your home is an investment in your lifestyle and happiness.Most important is purchasing within your means, which requires you to budget properly. Then whether you enter the market as it is climbing or slightly on the decline, if you have the finances for your mortgage, utilities and property taxes, you’ll be fine. So the question isn’t ‘if you should buy – it’s what can you afford to buy?
H: What’s the impact of the rise in interest rates?
TJ: You’d think an interest rate increase from 2.7% to even as high as 3.75% is bad for new homebuyers. In fact, this increase played a big role in cooling the super hot real estate market, resulting in the decrease of home prices we have seen since mid-2017.
Even with the slight increase, interest rates are still as low as they have ever been. It’s like the banks are practically giving money away! If you’re not taking advantage of these rates, then you’re missing an incredible opportunity to get into the market. If you wait for rates to increase to 5% – 7%, the cost of borrowing money will double for you.
It is essential to understand there will always be factors that impact the market like interest rate fluctuations and government policies. This is good because it helps regulate the market so it never gets out of control.
H: What is the best financial strategy for purchasing a home?
TJ: As of January 2018, you must qualify for a mortgage at a 5-year interest rate regardless of your down payment amount. You will need to save enough money for a minimum 5% down payment, however I recommend 20% because you will avoid paying for mortgage loan insurance.
Start by tracking your income and expenses to create a budget and determine how much you can afford for a down payment, monthly mortgage payments, taxes and a little extra for repairs. I highly recommend consulting with an experienced mortgage specialist to determine what you can afford, and the best mortgage options available for you. But to get into the real estate market, you must get your finances in order.
You may have to make some sacrifices in your spending, but in the end, the pride of ownership in a sound investment makes it all worthwhile. Of course another option is with the financial assistance of family and friends. The ‘Bank of Mom or Dad’ has always been a great way to help new homebuyers.
H: Is there a difference between buying a new home versus an older home?
TJ: For first-time homebuyers, I highly recommend buying a new home from a reputable developer. You will receive the peace of mind and guarantees that comes with purchasing a new, quality product for a set price, while being able to customize it, and having their support team to rely on for customer service. Having a set price means you will avoid the uncertainty and dangers of a bidding war that could cost you tens of thousands of dollars.
The good news is that on a new home project, the builder will accept a 10% deposit with the remaining 90% balance required on closing. It generally takes 18- 36 months for a new homebuilder to construct your house, giving you that extra time to save for the balance.
A LITTLE BIT ABOUT TJ
At just 48, TJ has 25 years’ experience buying thousands acres of land, building thousands of homes, and developing dozens of communities across Ontario.
TJ, brother Ernie, and sister Elem were born into a ‘real estate and construction’ family founded by their father, Tony Sr. who arrived from Italy in 1957 at age 16. He learned to drywall for the housing industry, and seven years later he founded Torino Drywall, which he quickly grew into one of Canada’s largest trades.
The family began purchasing farmland to eventually develop both residential and industrial buildings, which became Country Homes and Tonlu Properties respectfully.
In 2017, the family created the Rinomato Group of Companies to showcase its integrated business approach.
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