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Join the ranks of the rookie owner Compelling factors make it a realistic time to take the plunge

By Jane Cardillo, Postmedia News

Clay Simpson is pretty pumped and a little nervous about his new purchase — a $300,000 duplex in south Edmonton.

The 26-year-old, who graduated as a machinist from the Northern Alberta Institute of Technology last spring, recently took possession of the 1,100-square-foot home.

"It's definitely stressful," he says of his decision to buy what will likely be one of the most expensive items he ever owns.

But making it a little easier was the knowledge that he'll pay about $1,400 monthly on his mortgage, a rate he describes as afford-able.

"It's just myself buying this place," Simpson says. "So unless you were with a spouse or somebody else in on the house, interest rates would have to be low for you to be able to afford it."

Interest rates are sitting at historic lows, making it a great time to step into the home-buying market, say housing experts like Sandra Young.

"Interest rates directly affect afford-ability and the interest rates look like they're going to stay fairly stable," says Young, general manager and vice-president of Homes by Avi in Edmonton.

Rohit Gupta agrees. "Interest rates are very low today, they're the lowest they've ever been," says the chief financial officer of Rohit Group of Companies, a land developer and home builder.

"I'm not sure how long these low interest rates will last; they're not in perpetuity. But they're here today; take advantage of them."

Buying a home at this time of year has its perks, says realtor Sara MacLennan, who, with partner Sheldon Johnston, produces The Edmonton Real Estate Blog.

Typically as winter approaches, the number of homes for sale drops, leaving perspective buyers with less selection. But this year, inventory is still relatively high, MacLennan says.

"So they have the benefit of lots of homes to choose from, not too many people to compete with and the low interest rates."

Prices are lower now than they will be in the spring, she says.

"If you wait until the spring market and you're looking in a really competitive price range, say $350,000 to $450,000 — there's probably 20 or 30 other buyers that are considering looking at it as well."

That drives up the asking price, MacLennan says.

"You can end up — in a multiple-offer situation."

Costs associated with house building have risen and will probably do so again in the spring, says Donna Bygrave, marketing manager with land developer, United Communities.

"It's not only us seeing increases in our land-related costs," says Bygrave. "I know that the builders are getting some increases from their trades and supplies.

"So, you add the two together and you're way better off to buy today than to wait until a little further down the road, because it's only going to be more expensive."

If you decide to buy, realtor Sheldon Johnston offers this advice: Make sure you can afford it.

"They have to look at their own personal situation," Johnston says. "How's their debt, what's their job situation like?

"Then they should be talking to a mortgage broker and getting an idea of what it is they can afford. If they're first-time homebuyers, that's extremely important."

Simpson got his finances in order before he started house-hunting.

"Go to your bank and get pre-approved before you even start looking around because all the pre-approval takes time," Simpson says.

He also started saving early.

"I just thank God that I started putting money into RSPs when I was in my early 20s, because without that down payment you can be making 100 grand a year and still can't get the house," he says.

To keep costs manageable, Simpson chose a smaller, less-expensive home, a move Young says makes a lot of sense.

"There's a lot of great-priced product out there," says Young, who de-scribes duplexes and row houses as affordable choices.

"I think some of them are in the high 290s to low 300s. Those are really great price-points for a full-package deal with a garage and landscaping, the whole nine yards."

Bygrave points to another benefit of home ownership.

"People are paying $1,200 a month rent. In lots of cases that's equivalent to what you could get into a home and be paying for your mortgage payments."

Simpson experiences that first-hand.

"Basically you're going to be paying either rent or mortgage payments every month, so you might as well have the mortgage," he says.

"It's kind of like investing your money as opposed to just giving it to somebody else."

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