You’re ready to buy luxury real estate… but your mortgage is going to cost how much? What? How are you going to afford THAT? Don’t worry though because there are some great and easy ways to save on luxury homes for sale. Here we’re going to go over some of the best ways to save – hopefully a few you didn’t know about.
Don’t Take a Long Mortgage
I know this sounds insane, you’ll have higher monthly payments right? But every month that passes by that you’re paying extra interest is another month that interest is compounding. You’re going to need to look beyond that 25 year max mortgage and see if you can find one that’s more 15 to 20 years long. If you can go shorter than that AND it off before it ends, go for it! Up until recently you could get a max 30 year mortgage but the Bank of Canada changed that – the longer you’re paying on your luxury real estate the more can go wrong.
Save for Your Down Payment
If you can’t get up 20% for your down payment, you’re going to have to purchase something called PMI or private mortgage insurance. This is bad, very bad, especially when it comes to luxury homes for sale. You’ll want to have that 20% up front – if you don’t have it, start saving now. If you are buying a $900,000 home, you’ll have to pay $9,000 a month in PMI (1% of the value). This is just awful, and that’s $9,000 a month that can go towards paying off your mortgage.
Get Financed Ahead of Time
Want to know the secret to getting the best mortgage? Planning ahead! If you get pre-approved (not pre-qualified, this is virtually useless) you’ll be able to lock in low rates, good money and good terms for up to 6 months after the lender has pre-approved you. You shouldn’t have to pay more than you have to, and when you plan ahead you’re going to be able to avoid that altogether. Working with a planner or mortgage broker is going to help you on that end.
Work With a Luxury Realtor
Are you really going to shop for luxury real estate or homes for sale on Craigslist? Really? Stop that! Don’t do it! You want a professional to help you know which neighbourhoods are good, which houses are overvalued and help you find the hidden gems that are right for you. You need that extra help to have the protection you need to stay safe – don’t forget to hire a real estate lawyer as well! While private sales are always an option, you’re still going to need a luxury realtor. Don’t work without a net, make sure you’re covered and getting the house that’s best for you.
If you want to be able to make the most of your luxury home purchase, start planning now. A prepared buyer is a buyer that saves more money!
The Goodale Miller Team is the #1 team in Canada for Century 21 11 years running. To learn more visit http://www.goodalemillerteam.com