Can first-time home buyers achieve their goals in this market? Here are some programs designed to help new buyers in Canada.
“Am I ready to buy a home?” This is a common question Canadians ask themselves, but the answer isn’t always straightforward. There are tons of factors that will influence your ability to buy a house! You need to consider housing prices, budgets, your future plans, and your own feelings of readiness. Buying a house can be time consuming, stressful, and expensive. You need to know for sure you’re ready for this commitment. If you’re not sure how to begin to know whether or not you’re prepared, here are a few signs that point to you being ready to buy!
#1 You have saved enough for a down payment
First, you must have a down payment saved up before you’re ready to buy a home. Your down payment will be the biggest upfront cost you have to face when buying a home. This means it requires lots of planning and saving ahead of time. To buy a home in Canada, you must provide a down payment between five and 20 per cent of your home’s purchase price. Given the average price of a home in Canada has surpassed $800,000 according to the Canadian Real Estate Association (CREA), this means your down payment will be tens of thousands of dollars at the minimum. Unless you have that much money kicking around without actively budgeting for it, you probably need to save for a while to reach this amount. If you’ve been saving for a down payment and it exceeds five per cent of an average purchase price, you are likely ready to buy a home.
#2 You have researched the market
Serious home buyers must take the time to research the market they’re about to dive into. Buying a home isn’t something most people can spontaneously jump into without proper preparation. People who are ready to buy a home do their homework first. This means understanding what average housing prices are in the area you want to buy, and what types of properties are available. It also means knowing what your budget is, how supply and demand are shaping up, and how long homes stay on the market, to name a few considerations. Of course, your real estate agent can help you answer a lot of these questions, but it’s important for you to do your research as well. If you feel like you have a solid understanding of these aspects of the market, you may be ready to buy.
#3 You understand your housing needs
Before you buy a home, you need to know what kind of home you’re looking for. It’s a big market out there, so the more specific you are, the better luck you’ll have with your search. Have you given much thought to your housing requirements? You should have an idea of the type of property you want, whether that’s a detached house, a townhome, or a condo. The size of your home is also important, such as the number of bedrooms and outdoor space. Consider the location you want to live in, whether it’s an urban or rural setting. You should also narrow down what you want, but don’t absolutely need, in a home. This allows you to be specific, but also flexible. For example, is it a dealbreaker to not have a pool or easy access to transit? How important is the age of the home? Ask yourself these types of questions to understand what you truly need and want in a home.
#4 You want to settle down
You may be ready to buy a home if you’re sure you want to settle down in a specific area. Buying a house takes a lot of time, money, and energy, so you shouldn’t go through the process if you’re not sure where you will be in two years. You should have established roots and know you want to stay in the area, and that your home will suit your needs for years to come. Your first home doesn’t have to be perfect, because odds are, it won’t be your final house. However, it should support you for a long time. Breaking your mortgage terms can be pricey and stressful, which is why we don’t recommend putting down roots and buying a home unless you are confident you will be staying there for a long time.
#5 You’re familiar with the costs
Buying a home is more than paying a down payment and monthly mortgage costs. You should familiarize yourself with the other expenses of homeownership before you can be confident you’re ready to buy a house of your own. You will have to pay for things like a home appraisal and inspection when you’re zeroing in on a property you like. You’ll also be facing legal fees for the work of a lawyer to help draft title transfers and other documents for the home buying process. You’ll likely be hiring a moving company to help transport your belongings on moving day. Apart from these one-time costs, you will also have to pay for utilities and things like internet and cable. Lastly, do some research on closing costs to understand what you will be expected to pay.
These signs aren’t a foolproof way to determine whether you’re ready to buy a home. However, they should point you in the right direction. In the end, it comes down to your own feelings of preparedness and your commitment to buying in this market. If you think you’re ready to take the plunge, we recommend getting in touch with a mortgage broker! We can help put you on the right track so you can find the best mortgage product for your future.
If you have any questions about your mortgage or buying a home, give us a call at Centum Home Lenders! You can reach us at 506-854-6847, or get in touch with us here.