FOR BUYERS
Many desire to own a home—living this wish might take some time, but it will be one of your life’s best experiences. While purchasing a home can be a dream, a financial milestone, and a worthy investment, homeownership comes with so many challenges. Determining if to buy a house is a significant decision requiring proper consideration. But how do you decide to purchase or rent a home?
Do you have a stable income?
A reliable source of income is vital to making monthly payments on your mortgage. You should have a stable income for at least the next few years and demonstrate a history of steady employment in the past.
Do you have funds for a down payment?
The amount of your down payment impacts what you can afford, the type of mortgage you get and if you need to purchase mortgage default insurance. Depending on your goal, you may consider ways to save for a down payment or find alternate funding options. This amount is, at minimum, 5% of the purchase price of the home you are planning to buy.
How much can you afford?
Wise to start home shopping in a lender’s office with a mortgage application. Shopping around for the best rate is highly recommended. Lenders will pull your credit score and determine your debt-to-income ratio (DTI). A DTI ratio compares your total monthly debts, gross monthly income, and new mortgage payment. Lenders use this calculation to determine your ability to repay the funds you are borrowing.
Do you have an emergency fund?
An emergency fund can be handy if you are out of work or help cover unforeseen expenses. Most experts recommend having a sufficient amount to pay or three to six months of living expenses.
How long do you plan to live in your next home?
Purchasing a home is a long-time investment that requires you to be wise with your decisions. Before buying a home, check if you plan to live in it for the long or short term.
Now that you have considered the costs of becoming a homeowner, you need to answer one more question in this process.
Do you have an expert real estate agent you can trust?
It is challenging to find a house you love within your budget—that is why buyers work with agents who make real estate their sense of living. Plus, having an agent by your side brings two significant benefits:
- Save money. In most cases, the seller pays the commission for a buyer’s agent—so you pay nothing to get expert help! Even better, an agent can save you thousands of dollars by fighting for your best interests at the negotiation table.
- Save time. Let an expert who knows the process, market, laws and regulations specific to your city take care of the process.
I am here to guide you in this complex process and ensure you are happy and satisfied that you have found the perfect home in the neighbourhood you love!
Lastly, I want to speak about the cost of homeownership that goes far beyond your monthly mortgage payment. The following are some of the costs:
- Insurance: Your lender will require you to obtain house insurance before closing. To make sure it is adequately insured to protect its investment.
- Property taxes: Property tax is calculated and billed annually using the property’s assessed value.
- Utilities: You must ensure you can take care of water, electricity, trash collection and sewage bill each month when you own a home. Do you use the internet and cable and have a phone line? Those expenses will need to be paid in your new home as well.
- Maintenance: You need to make sure you can cover your ongoing maintenance costs and any unexpected repairs.
- Condominium fees: These only apply to condominium units or townhouses. Other costs, such as utilities or maintenance, may be included in condo fees.
- Closing costs: Closing costs are one-time expenses that may include title insurance, mortgage insurance, legal fees, home inspection fee, land transfer tax, moving cost and more.
Reach out to learn more about how I can make the home-buying process more straightforward.