Buying a home is a big decision. And taking on a mortgage is going to be the biggest responsibility you take on in your lifetime. So are you ready for it? It’s the question that homebuyers ask themselves before they actually start searching the market. And now the question is, are you ready? Here are three ways to tell.
Your can do it financially
Sure you may be able to take on that mortgage right now. But what about the property taxes that go along with it? And the insurance? And the utilities? Not to mention what happens should the furnace break down, or the roof starts leaking. All of these expenses have to be taken into consideration when you’re thinking about buying a home.
Okay, so you’ve crunched the numbers and were you to take on those extra expenses today, you’d be able to afford them. But what if something happened to your job? Or your spouse’s job? What if even your hours were reduced slightly, due to cost-cutting measures by your company? You have to prepare for the future when you’re considering whether or not you’d be able to afford that home in the future. And while you should plan for the expected – such as marriage, a new baby, or a child attending university in the next few years. But, you also need to plan for the unexpected – which are usually the things we’d like to think about the least.
You’ll be living in it for awhile
‘Awhile’ means more than a year. Unless you’re planning to flip the property or turn it into a rental property, you really should only buy a home if you plan on sticking around in it for a little while. Making a house a home really does require a little bit of attention, care, and detail. And those may not be things that you want to invest in if you’re not staying in the home for awhile. But you are buying it after all, and buying and selling within the same year – without it being part of an investment strategy – is just not practical.
Aside from not having the time to put the emotional ties into it (that is some of the most rewarding part of home ownership,) buying and selling so quickly can cost you enormously. There are questions of breaking mortgages, lawyer fees, appraisal costs, and many other fees and expenses that come with both buying and selling a home. If you’ll have to pay these both for buying the home, and then again for selling it just a short time later, it’s likely not going to be worth whatever little gain you’ll derive from it.
Market conditions are good
Everything can be right in line for you financially, and you could even have a contingency plan in place should things go awry in your career or personal situation. But, none of that really means anything if the market is in a bad place. Right now markets across Canada are fairly hot across the board. But some markets still remain largely overpriced, even though the Toronto Real Estate Board reports that home sales were down in June 2012 when compared with June 2011. Home prices though, keep climbing and that could be one reason why. While Toronto is still considered to be a healthy market, buyers who are looking at entering it will need to seriously consider the area of Toronto they’re moving to, and take future market conditions into consideration as well – like whether or not sales will continue to decline, sending home prices down.
Of course there are many things you’ll need to consider when thinking of whether or not buying a home right now is right for you. But when you’re just starting out, taking these three things into consideration will give you a great head start.
