Buying your first home is a huge decision! Being a homeowner brings a sense of pride and freedom – you finally have a place to call your own. Although this leap into home ownership may seem enticing, there’s a lot to think about. From your finances, to your home preferences and future plans, there’s so much to consider before signing on the dotted line and grabbing the keys to your new abode. Think you’re ready to buy your first home? We’ve come up with four signs that prove it's time for you to make a purchase.
1.You’re financially sound
Being financially sound is probably the most important sign that you’re finally ready to be a homeowner. When assessing if you’re financially ready for this big decision, you have to be honest about two things - your credit score and your savings. First, your credit score. Your credit score plays a huge role in your journey to homeownership. This is how banks and other lenders assess if you are capable of paying back loans. The higher your credit score, the better. But, as a minimum, you should ensure that you’re somewhere around the 650 mark as that should get you approved for most loans from financial institutions. Click here deeper dive into the importance of your credit score in the home buying process.
The next part of your finances you should assess is your savings. It goes without saying that in order to own a home, you have to have quite a bit of money saved up. We encourage you to have more money than necessary saved. This will ensure that you can comfortably afford things like your down payment and mortgage payments without making a huge dent in your emergency funds. Also, having a good amount of savings will ensure that you’re ready for any unexpected costs that arise in the buying process. If your bank account is looking good, this is a big sign you’re ready to own.
2. You don’t plan on moving anytime soon
While you can never be sure of anything, it's wise to at least plan to live in your home long enough that purchasing makes sense. Consider things like your career, your relationship, if you’re already in a partnership, do you plan on having children soon? IF so you may want to think of a larger home, if your children are moving out soon, you may want to go smaller. If you know that moving to a new neighbourhood, city or country is a possibility within the next year or two, then it’s probably best to keep renting for the meantime.
3. You’re ready to take responsibility
Owning a home is very different from renting. When you’re a renter, if something in your house needs fixing, you can simply call your landlord to handle it. This isn’t the case for homeowners. Since you’re now the one paying the mortgage, you’ll also be responsible for any repairs your home needs. You’ll be the one talking to plumbers and other tradespeople who can help you keep your house in tiptop shape. If this sounds like something you can handle from time-to-time, then you may just be ready for your first home.
4. You have a steady source of income
Last, but definitely not least, a steady source of income. Having a stable job helps significantly with the financial aspect of homeownership. If you’ve had a steady income for two or more years, chances are, you’ve saved enough to afford a down payment for your new home. Steady employment also increases your chances of getting approved for a mortgage loan and will help you afford your monthly mortgage payments after you’ve taken possession of your new place. Having a solid employment history is a great indicator that you’re ready to be a homeowner.
Purchasing your very own home is still a big part of the Canadian dream and a huge milestone in adult life. If you manage to check off a few of the factors we’ve mentioned, you may be ready to take the leap!