As a first-time-homebuyer you need to make sure you are ready, before you commit. Looking at the following signs will help you to decide where you are at.
You have saved enough for the down payment: Most people think the biggest hurdle to overcome when buying a house, is saving up a down payment. You need to have a minimum of 5% of the purchase price as a down payment. This down payment shows that you have some of your own money invested in the property, which gives the lender some comfort that you will protect your investment.
You have good credit: Having a perfect credit isn’t a requirement to get approved for a mortgage in Canada. The credit score range from 300 up to 900 points. the higher the score, the greater the likelihood a request for credit will be approved.
You can afford the mortgage payment: The amount of home you qualify for is tied to your debt to income ratio. It’s typically recommended to spend no higher than 35% of your monthly income on housing related expenses (mortgage, property tax and heating). If you’re renting a home, chances are that your mortgage payment will be close to what you’re paying in rent.
You have steady employment: If you have been in the same job with the same employer for at least 1 year, you’re financially stable enough to have a mortgage. Having steady employment history is a good indicator to the lenders, that you’re ready to buy a house.
You don’t plan on moving to a new city anytime soon: We all dream of living somewhere different. Buying a house is better financially than to rent, but only if you plan on staying put, for 3 years or more. If you don’t have any immediate plans on changing cities, then buying is a great option for you. There’s a chance that home you buy today, will increase in value in a few years. Buying a home is a great investment.
You have kids, or kids are on the way: If you already have children, you most likely want to settle down into a nice neighborhood. Kids don’t like moving away from their school and friends, so buying a home makes the most logical sense. If you don’t have kids, this doesn’t mean you’re not ready to buy a home, not at all.
You’re tired of renting: Renting is financially exhausting as you are basically paying someone else’s mortgage payment. You’re hurting your bank account and helping theirs. You might want to spruce your place up but as a renter, what’s the point. If you feel the need/want to upgrade your home, now is the time to buy. You will feel proud and a sense of accomplishment taking care of your own home.
If you think a few of these describe where you are in life, contact us, we can put you on a path to home ownership.
Original article: www.dominionlending.ca/news