Buying a home is a major decision. There are a million factors you need to consider, and the last thing you want to do is to rush into it blind. The overall housing situation is definitely challenging, so there is absolutely no reason to not be careful and considered when approaching this topic.
Do you think you’re ready to become a homeowner now? We’ve devised 8 questions to help you draw your own conclusion!
The first question is of course the most obvious. Can you even afford it? The minimum down payment in Canada is 5% for $500,000 and below. For houses over $500,000 but under $1 million, it’s going to be 5% for the first $500,000 and 10% for the remaining amount.
Some of us have a line of work that takes us places. That’s exciting, but having to move from one place to another means that owning a house will have to wait. If you plan to stay in one house for less than five years, consider renting for the moment. Housing is an investment, and the reason it’s exceptionally fulfilling is precisely because it’s a long-term one. Make sure that you can see it through. Otherwise, you should either look towards the future, or consider getting the house a few years ahead of schedule.
Your best indicators for being ready would be a stable job, a regular income, and a decent credit score. Your family situation also factors into consideration as well. For example, are you seriously seeing someone right now who is a long distance from you? If you took your relationship to the next level, which one of you is most likely moving? Home ownership is rarely a question of “if” - it’s more often a question of “when,” and you want the answer to that to be “soon.”
There are some situations where it’s okay to keep renting instead of rushing into buying a house. Of course, owning your own home is almost always preferable, but the overall lower costs of renting, including no property taxes, lower maintenance, etc., can sometimes mean that renting for now is the wiser option, especially with an eye towards improving your situation in the meantime. That way, owning a home becomes a viable option sooner than later.
If you treat renting as a stepping stone instead of a permanent situation, you will find that there is a perfect time to transition from renting to owning a home. In fact, you could even transition from renter to homeowner in a straight line through a rent to own program. We know a thing or two about that and would love to help.
The decision to become a homeowner doesn’t happen in a vacuum. It usually comes with a specific home already in mind. Have you considered that home carefully yet? What’s the neighborhood like? How does the developer plan to improve that area further? Have you inspected your prospective house thoroughly yet? Have you checked realtor.ca for a few alternatives yet? Whatever the case may be, it’s good to have a checklist on hand when shopping around for a house. Buyer’s remorse happens all the time, and you don’t want to be yet another statistic for that.
The initial down payment and the monthly down payments are only the first part of the puzzle. There are so many more costs, and we don’t just mean things like lawyer’s fees or closing costs. When renting, a lot of the repair and maintenance costs are shouldered by your landlord. As a homeowner, you now have to cover those. If you’re ready for that, then you’re really in a good position to start looking for your dream home.
In general, a credit score of about 650 would be enough for you to secure a mortgage in Canada. There are multiple factors that contribute to your credit score, and these include your payment history, your credit utilization, your credit history, new credit requests, and your types of credit. If you don’t meet that score, there are indeed alternate methods that could help you still get your dream home.
Let’s assume that you’re ready to buy a house. What do you ultimately want to accomplish with it? Will this house be where you plan to settle down and raise a family? Is this going to be an investment for you to eventually rent out or sell once you move on to acquiring a second home? Even this is important because it will shape what options are available to you when buying your house, and how much sooner you can do it for yourself.
If after asking these questions, you find yourself encountering a few hurdles, then you might need to wait a little longer to buy a home. We also think Requity Homes can help you bridge the gap that keeps your dreams from being a reality.
Not only that, but remember those additional costs, such as lawyer’s costs, and land transfer tax? Requity handles all of that for you, too!
Everyone deserves a fair shot at making their dreams come true. Requity believes in giving you that little boost you need to get across the finish line. Find out how our rent to own program could change your life today!
We are always expanding to new cities, or maybe you’re not looking yet.