Many people wonder if they are ready to buy a home. This is, of course, a personal question, and there is no single “right answer.” However, the Canada Mortgage and Housing Corporation (CMHC) offers a list of questions to ask yourself, and to discuss with your partner, if applicable, to help you decide if you are ready to move from renting to buying.
Are You Financially Stable?
Taking on a mortgage requires an ability to pay your mortgage monthly. This is the first step in determining whether you are ready to buy a home – but not the last! The Government of Canada’s Financial Consumer Agency of Canada offers a free budget calculator to help you determine your income and obligations. You can also use this handy mortgage qualifier tool.
Do You Have the Necessary Skills and Discipline?
Owning a home comes with predictable ongoing costs, such as mortgage and insurance. But it also comes with unexpected costs (see below). Homeownership requires financial management skills and discipline, including a willingness to save monthly for unexpected and planned housing-related costs. If you are going to need a new roof in five years, or want to update the kitchen next spring, planning and discipline are key. First, you must figure out how much a roof will cost, or how much of a renovation you can afford. Next, you must calculate how much you need to save each month to meet these goals. Not everyone has the will or the wherewithal to actually employ these skills. And that’s fine. Home ownership isn’t for everyone.
Are you Ready and Willing to Take on the Responsibility for Unexpected Costs?
In addition to planned expenses, homeownership comes with unexpected costs renters don’t face. For example, when the water heater goes out at an apartment, as a renter, this is only your problem temporarily, until the landlord fixes the problem. When the water heater goes out in the home that you own, you, and only you are responsible for fixing this.
Do You Have the Time to Engage in Ongoing Home Maintenance or the Budget to Pay Someone Else to Do It?
Owning a home requires a commitment to regular home maintenance. This includes mowing the lawn and shoveling the sidewalk. It also includes painting the house, turning the furnace, replacing broken windows, the list goes on and on. Perhaps you are not skilled in or aren’t interested in ongoing home maintenance. This is fine, as long as you have the budget and the willingness to pay for someone else to perform these tasks.
If You Are Ready. . .
Once you have reviewed the above questions, if you think you are ready, we at Re/Max Hallmark Realty Ltd., are interested in working with you. We love working with first time home buyers. Contact us today!