So you’re starting to feel the itch to own your own home but have no idea what it entails to get from here to having those keys in your hands? Buying a home, for most of us, will be the biggest purchase we make in our lives and also one of the most stressful times of our lives.
According to the Canadian Association of Accredited Mortgage Professionals survey on home buying from 2015, it seems that 45% of homebuyers are between 25 and 34 with down payments averaging 21% of the home price. Although that may seem like a big number to some it should be noted that 6% of homebuyers make less than $40,000 a year as well.
Having the knowledge to start planning now will make the process easier in the long run so let’s take a look at what you need to consider.
Check your credit score and make sure it is good. This can easily be done through Equifax Canada (1-800-465-7166 www.equifax.ca) or TransUnion Canada (1-866-525-0262 www.transunion.ca). If your score needs to be raised or there are issues that need to be disputed this will allow you some time to do that. Pay off bad debts if you can. Solving issues with your credit report take time, raising the score takes time, plan accordingly so you are not surprised when it’s time to get a mortgage.
Start saving for a down payment-Ideally you would want to have a 20% down payment for your house so that you don’t have to pay for mortgage default insurance although with the boom in housing prices in recent years it may be smarter to buy with a 5% downpayment. Keep in mind the more of a down payment you put down the lower your mortgage payments will be monthly. Realistically your monthly housing costs should be less than 32% of your gross monthly income and you can get a handy tool to see how much you can afford here.
Save money for closing costs. Buying a home is much more than a mortgage and a dream. You will be paying for insurance, land transfer and a lawyer to name a few of many. To get a more comprehensive list you can check out this link on closing costs.
Get pre-approved for your mortgage. This will save you so much time and heartache down the line and allow you to know exactly what you can afford.
Planning for the Future
When planning to become homeowners many conversations have to happen, none as important as what your family dynamic will be in the future. Your significant other and you will need to sit down and honestly discuss and plan for a future you do not yet have.
- Where do we want to live?
- What are our boundaries?
- Do we want to commute?
- Can we commute to work?
- Access to public transportation?
- Do we have a religious pull to one area (church, mosque, temple, etc.)?
- Is there any cultural pull to a certain area?
- Do we need to live beside family?
- Is our current neighbourhood the one for us?
- Is the school district important?
- Is it important to be walking distance to shopping and schools?
- How many bedrooms do we need?
- Do we need a garage? carport? Driveway? Parking on the street?
- Do we want a chef’s kitchen with all the bells and whistles?
- How many washrooms do we need?
- Do we want an ensuite?
- Do we need a home office?
- Do we want a playroom for the kids?
- Finished basement or do we want to finish it ourselves?
- Do we want a house that is move-in ready or do we want to renovate?
- Do we prefer carpet or hardwood?
- Shower or bathtub? Both?
- Laundry facilities? Do we want a designated laundry room with lots of storage or just a spot in the basement?
- Do we want a pool?
- How important is a back yard?
- Do we like to entertain often? If yes, how important is the layout of our home and outdoor space in regards to entertaining?
- Do we want it to be fully fenced?
- Do we want to be in an urban setting or have lots of green space around us?
- What amenities do we need? (pool, gym, party room, etc…)
- How much condo fees can we afford?
- Are we fine with having “less” living space?
- What floor do we want to live on? Lowest and Highest?
- What view do we want?
- Are we aware that condos have restrictions on reno’s, decor and pet size?
- If you are a parent, is there other parents in the building?
- Are there parks close by?
- Check the demographics of the building. If this is a building full of young twenty-something party kids it may not be the best choice for a family.
Get your free printable here-> Planning for the Future
Some of these questions are more important than others. You may find when you start to answer some of these questions that your partner and you have some very different expectations and will need to compromise. That desired neighbourhood could very well have to go in order to get more home for your dollar.
I mean if you are not Martha Stewart in the kitchen you may not need to spend extra dollars on a chef’s kitchen. Also, as much as you think carpets are great keep in mind that you are parents to small kids, they are a mess and stains can and will happen. Top of my list when searching for my first home was no carpet, and I would walk out of every single home my real estate agent showed us with it in. Why? Because I had spent the past two years cleaning my 5 floor, fully carpeted townhouse once a week and I refused to do it anymore.
Another thing we were not willing to compromise on was location so we had to settle for an older home and spend 6 weeks renovating it. I mentioned that buying a house was stressful, try not having floors or a functioning kitchen from November to the week before Christmas with a 3- and 4-year-old. Took the joy right out of being first-time homeowners.
As for having that important conversation about the size of our family before we purchased-we didn’t think it through enough. Less than a month after moving into our 3-bedroom house we discovered we were expecting baby number 3 and soon after number 4. We thankfully have a finished basement that we parents can move into once the children are older but it is something to keep in mind. Learn from our mistakes.
Once you have taken the time to discuss all of these things and have a clear idea of what you want you may discover that what you are looking for is quite unique.
Building the home of your dreams may be the answer. Do your research and look for a builder that has the reputation to back them up, like Treasure Hill. They have won multiple BILD awards in both 2012 and 2014 including Lowrise Community of the Year. Known for their unique and quality luxury homes throughout the GTA you can take your list of must-haves and turn it into a reality. Start your home ownership journey now and check out Treasure Hill’s website to make your dreams a reality.
*Opinions expressed are those of the author, and not necessarily those of Parent Life Network or their partners.