(NC) If the thought of the reawakening real estate market excites you, you may be ready to buy a home. Aspiring homeowners will need to have a few things locked down before taking the plunge.
“Above all else, homeownership needs to make sense financially,” says Phil Dorner, president of the Ontario Real Estate Association. “Market conditions, mortgage rates, investment opportunities – all of these factors are important, but they should not be the only reasons for buying a home.”
According to Dorner, you'll know you're ready to buy a home when:
You're familiar with the market – You've discussed options with your Realtor and you're familiar with home prices in the neighbourhoods you're considering.
You know how much you can afford – You've worked out how much is required for the down payment and closing costs, as well as monthly mortgage payments and other expenses like utilities, insurance, property taxes and maintenance.
You have the money for a down payment – You have at least five per cent of the property value saved and ready to put towards a down payment.
You have a reliable income – You have consistent cash flow to cover monthly expenses.
You have emergency savings – If your income is unexpectedly interrupted, you'll be able to make your mortgage payments.
Your debts are under control – Your debt-to-income ratio is where it needs to be in order to secure a mortgage through a lender.
Your credit history is in good shape – You've spent the last several months, or years, building or perfecting your credit in order to help secure a lower interest rate on your mortgage resulting in a lower monthly payment.
You are prepared for the responsibility – You are familiar with all of the maintenance that a home requires and you're prepared to deal with it.
“If you checked all or most of these points, you may be ready to buy a home,” says Dorner. “It's a big step, but it's also an enjoyable and extremely rewarding one.”
More information is available at www.wedothehomework.ca.
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