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A Cheat Sheet For First-Time Home Buyers In Today’s Tight Market

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In today’s housing market where affordable single-family homes are difficult to come by, potential first-time buyers have been forced to make compromises in how they shop for a home and what’s on their wish list to make their homeownership dreams a reality.

The 2019 NerdWallet Home Buyer Report finds that 36% of Americans plan to buy a home in the next five years. Of them, 24% say they’ll be making the purchase within the next 12 months.

The report examines the compromises and ways first-time buyers could save money. Here are some key findings from the report based on a new online survey conducted by The Harris Poll in January.

Upping the ante. Nearly half (45%) of Americans who have purchased a home in the last five years offered more than the asking price before having their offers accepted. NerdWallet home expert Holden Lewis attributes this to stiff competition in a sellers market.

“When we looked at the people who bought homes in the last five years, people who were first timers and the people who were repeat buyers, we found that first-time home buyers made more offers before finally having one accepted,” said Lewis. “For all buyers, the average was three offers before an offer was finally accepted, and that might be for one house or they made offers for more than one. But for first timers, they made nearly four offers before having one accepted.”

First-time home buyers are likely to be younger and on a leaner budget. Those with less to spend stand to feel squeezed more.

“They might be low-balling in their first offer in a market in which that is not really the way to do it,” said Lewis. “I think a bigger part does not have that much to do with inexperience. When you’re buying an entry-level home, it’s tougher. There are more buyers, there’s more competition, and therefore, you’re going to have to make more offers on average.”

Down payment misconceptions. Sixty-two percent of Americans believe they must put at least 20% down in order to purchase a home.

“This is something we try to continually educate people about,” Lewis said. “You do not need a 20% down payment. With a conventional loan you can often get a home with a 3% down payment. With FHA, you can get a home with a 3.5% down payment and your credit doesn’t even have to be that good. If you’re a veteran, you can buy a house with a VA loan with zero down. Or if it’s a rural area, you can get a loan with zero down.”

With a smaller down payment, you don’t have to fork over as much money initially, but your monthly house payments are going to be larger. Lewis said that with home prices continually rising, a buyer might be better off buying in the current market.

“Essentially if you buy a house today, you might be buying it for 10% less than a year from now,” he said. “The earlier you buy that house, the more likely you are to get that house at an affordable price.”

Missing out on savings. Home buyers could save more than $400 in the first year of a 30-year mortgage by comparing mortgage rates among lenders before applying, the report finds.

“Mortgage rate shopping is extremely important and is not done nearly often enough,” said Lewis. “In our survey, we found that half of people who got a mortgage in the last five years applied to only one lender. If each of them had applied to at least five lenders, they would have saved an average of $400 in interest in their first year of having their mortgage. Of course, if you have a mortgage in its first year, that $400 would compound year by year.”

Lewis said digital mortgage platforms offer convenience and savings. “The income information is available to the lender online, bank account information, information about debt payments.  When it’s that easy to apply for a mortgage, why not apply for five mortgages?” he said.

With that in mind, Lewis added, “It’s really a good idea to not max out the absolute most you can afford to borrow and pay every month. I always recommend giving yourself a little bit of wiggle room. With money that is saved over every month after you paid all your debts, including your mortgage, you can pay for car repairs and vacations and save money for the inevitable maintenance and repairs on the home.”

Feeling the pinch after the purchase. One-fourth (25%) of American homeowners say they no longer felt financially secure after buying their current home, and more than one-third (34%) of first-time home buyers echoed that sentiment.

Lewis attributes this insecurity to lack of experience. “They might not fully comprehend how much it costs to own a home with insurance and taxes,” he said. “And since they are more likely to get caught up in bidding competitions, they are more likely to pay a little bit more than they expected to pay. Therefore, after they close they are feeling a little bit financially precarious.”

Lewis recommends working with a licensed real estate agent and using a home affordability calculator to estimate how much you realistically can afford to pay for a home.

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Halifax’s Scotiabank Centre reopens for Mooseheads’ season opener

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The home of the Halifax Mooseheads will reopen next month to host the team’s season home opener, although the experience will be different as a result of COVID-19.

The Scotiabank Centre will reopen on Oct. 3, after its reopening framework was reviewed by Nova Scotia’s public health and occupational health and safety departments, the company operating the centre and the Quebec Major Junior Hockey League (QMJHL) team announced on Tuesday.

“We’re thrilled to be reopening and welcoming our fans back to Scotiabank Centre,” said Carrie Cussons, the president and CEO of Scotiabank Centre.

The centre will be following all standard health and safety guidelines related to the wearing of non-medical masks, hand hygiene, physical distancing and contact tracing, the company said.

But there will be additional protections put in place as well in order to limit any possible spread of the novel coronavirus.

Scotiabank Centre will be divided into separate zones of up to 200 people with set washrooms, concessions and entrance/exit points for each zone.

The organization also announced that tickets will be sold in groups of up to 10 within the same bubble, respecting the province’s guidelines on gatherings.

Fans and attendees will be required to wear a non-medical mask at all times, except when they are consuming food or beverages, the Scotiabank Centre said.

Tickets will also be mobile-only in order to minimize close contact between individuals.

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Candidate slate set for Halifax election as mayoral race grows to three candidates

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The slate of candidates for the Halifax Regional Municipality’s upcoming election has been finalized and it’s now officially a three-horse race for the municipality’s mayoral seat.

Incumbent mayor Mike Savage will face off against Coun. Matt Whitman, the current representative for the Hammonds Plains–St. Margarets, and political newcomer Max Taylor.

Whitman and Savage have previously announced their plans to run but Taylor’s inclusion in the race was a last minute surprise.

On his campaign’s Facebook page, the 22-year-old says his platform is “simple”

“Get out and vote. I don’t care who you vote for, I care that you vote,” he writes.

One of the more notable aspects of Taylor’s presence in the race is his status on social media platform Tik Tok.

He’s built a following of more than 600,000 people on the platform and his videos have generated more than 20.6 million likes.

What that will do for his candidacy is up in the air, but he’s sure to bring a youthful energy to the process.

 

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Here’s what Toronto’s new 57-storey skyscraper will look like

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The corner of Bay and Harbour may be getting a new 57-storey office tower perched atop the heritage Toronto Harbour Commission Building.

Updated plans for The Hub — a skyscraper from multinational corporation Oxford Properties — have been submitted, and if approved, will see a building designed by London-based firm Rogers Stirk Harbour + Partners to 30 Bay Street.

The project near Toronto’s waterfront which was initially proposed in 2018 will add around 1.4 million square feet of office space to the neighbourhood. The building’s west side will also be directly connected to The PATH network.

The Hub will also sit overtop (but only lightly touching) its next door neighbour: the six-storey Toronto Harbour Commission Building, which was built in 1917.

Nicknamed “The T”, the historic building was sold to Oxford in 2017 for $96 million. Fun fact: The T is also reportedly haunted by the ghost of a janitor.

It’s not entirely clear how the interior of the old Commission Building will play into The Hub’s commercial workspace, but the design of the 57-storey building shows the strategic use of four columns to allow for distance between the main building and The T.

The two buildings will be connected by a “finely detailed glazed atrium.”

Windows will stretch from floor to ceiling in the four-storey lobby, which will be home to restaurants, retail spaces, meeting and event spaces, and maybe a fitness facility.

Floors five to eight of the podium will see larger office floors.

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