Think you are ready to buy that first house and become a homeowner? These five tell-tale signs will let you know if you are ready to take the plunge into the real estate market or if you should hold off before realizing your dream of buying your first home.
You have a stable career
New graduates are not really the most ideal candidates for home buying, as without a stable job, you may not get approved for a mortgage. Many lenders like to see a good history of work, especially at the same company. For your own peace of mind, you should ask yourself if your job and career are on a good path and are going to stay that way for many years to come.
You have a plan for the future
Buying a house on a whim is never a great idea. Consider where you want to be in a year, two years, five years and ten years. When you buy a home you want to stay in it for at least a few years in order for it to gain value. If you are planning to change towns, careers, find a spouse or have kids, you will want to factor this in to where you should live and if you should truly buy a house now or wait just a little longer.
You have income to spare
While buying a home is a great real estate investment, it can take more out of your wallet each month. You will not just be paying one monthly payment for housing any longer, you will also have to consider property taxes, condo fees (if applicable), home maintenance and repairs. No longer will you be able to call a landlord to fix a leak or broken appliance — the onus will be on you. To be truly ready to buy a home, you should have income to spare in your monthly budget to pay for these added and sometimes unexpected costs.
You have savings
You are going to need a down payment, so having savings is mandatory. In Canada, you need a minimum of 5% of your purchase price down, plus you will need 1-3% of the purchase price for closing costs. You can borrow money from your RRSP as a first-time buyer, so your savings do not all have to be in a savings account.
You are ready to settle down (so to speak)
Buying a home is a commitment, so you should be ready to settle down in terms of taking time to care for your home. You may also need to make some sacrifices in your budget (like your daily Starbucks run) in order to make your regular payments. While you do not want to get into a situation where you are house poor, you may have to realize that you might not be able to go out on the town every Saturday night or order in from your favourite restaurant once a week. But, once you are in your new home, you may not care! Dinner parties will be your new favourite thing to do!
When your tell-tale signs point you in the direction that it is time to enter into the real estate buyers market it helps to know trusted REALTORS® like ourselves have your best interest at heart. For more information on where to begin contact one of our agents today.
