Let’s face it, it’s easy to dream about owning your own home.
After all, investing in real estate is said to be one of the best investments to make in your lifetime. As compared to the stock market, there’s typically less risk associated in investing your money into real estate. Even when the market cools, real estate values generally continue to increase over time.
It all sounds pretty good, doesn’t it?
Of course, there’s no denying that investing in real estate and buying a home is an incredible decision. But, it’s equally important to ensure that you’re genuinely ready for such a significant step. After all, this is likely going to be the biggest investment you’ll make in your lifetime. To help, we’re sharing four signs to know whether or not you’re ready for home ownership.
You Have the Down payment
Let’s talk money, shall we?
First things first, it’s essential to ensure that you have enough money for a down payment. Upon meeting with a mortgage broker, one of the first questions they’re going to ask you is how much money you have available for a down payment. Unless you’re able to meet the minimum contribution, they’re going to refuse you the loan.
Remember, you can get creative in funding your down payment. For example, many first-time home buyers choose to withdraw money from their RRSP. Many first-time buyers also use money that has been “gifted” from family members to help cover their down payment.
You Have Emergency Funds
Being able to afford a home isn’t just about paying the mortgage. Instead, it’s about paying property taxes, home insurance, mortgage insurance, rising interest rates and increased utility bills. It’s also anything and everything in between that requires maintenance, replacement or immediate attention.
What if the roof needs repaired?
What if interest rates climb overnight?
What if you lose your job tomorrow?
Today, one of the biggest mistakes that first-time home buyers make is taking on a mortgage they cannot realistically afford. While they can technically afford to make the minimum contributions, very little money remains for unforeseen circumstances.
You’re Prepared for More Work
Being prepared for home ownership isn’t just about the financial aspect.
In fact, you ought to be ready to tackle a whole new set of responsibilities when it comes to home ownership. More often than not, these responsibilities tend to be time-consuming and turn into daily chores.
For example, those living in climates with snow legally have the shovel their driveway and sidewalks after a snowfall. Without doing so, the homeowner can face serious fines and subject themselves to the stink eye from the neighbours.
You Feel Ready to “Settle Down”
So, you’re ready for the suburbs?
Let’s face it, buying a house can be time-consuming and expensive. This means that if you move into the suburbs and find yourself missing that urban, rental lifestyle, making the switch back isn’t exactly simple.
Remember, a house is a long-term investment. You’re not going to profit very much if you buy and sell your house in as little as a few years. For example, the increase in value that took place in those few years might not yet be substantial. In fact, it might not even cover the cost to resell your home and finding a new place to live.
Are You Ready?
When it comes to home ownership, it’s absolutely crucial to be honest with yourself and your finances. If you find yourself answering “yes” to the above questions, it sounds like homeownership might be just around the corner.
What a time to be alive!
In this event, the next step is to contact a mortgage broker to find out what sort of mortgage you can quality for. From here, you can connect with the best agent for your search and begin the process of house shopping!