If you're in your twenties or early thirties and you look around at your friends you will likely see examples of people who are still renting and those who have already gone through houses and now own their own property. And as more people that you know make this transition you might be wondering if it's the right time for you to buy a home. There are many things that you need to think about before making this decision. Here are some of the most important things to start you off.
The most obvious question to answer is going to be whether or not you're financially ready. When you're looking at real estate in the GTA you're looking at signing a mortgage for hundreds of thousands of dollars that you will be expected to pay, with interest, over the next ten to thirty years. There are three things that you're going to want to examine in terms of your finances to make an informed decision. Credit Canada can help you learn how to balance a budget for starters.
The first is a comparison between how much you're paying now to rent versus how much you will be spending monthly if you were to move into a Toronto loft or a condo here in Mississauga. On top of paying your mortgage on time, you will also now be responsible for all of the utilities and everyday maintenance of the property. You need to know that you have the money to pay for everything from the heating bill to a new roof should you need one down the road. For example, many do not think twice about the capital cost of heating and air conditioning, until the HVAC breaks down and they have to contact someone about repairs. It's important to budget for ongoing maintenance on your home's systems (and be sure to have your systems checked regularly to avoid expensive repairs later - just ask Builders Choice, for example).
The second thing to consider is how much you currently have saved up for a down payment. While there are plans out there that will allow you to put less than twenty percent down when buying townhouses in Windsor or a home here in Mississauga, that does not mean that this is a good plan. The percentage that you're able to put into a down payment will help determine how much you are paying in interest over time on the property. Learn more about down payments from ratehub.ca.
Lastly, you're going to want to think about your long-term plan and how your finances are likely to change in the future. If you're banking on getting additional funds in the future from a promotion that you have not secured yet than you might want to wait until that happens before buying a home. You should also think if there are going to be additional costs to consider in the coming years, like from children.
Before you decide if this is the right time to buy you should also look at the current market to see if it's favoring the buyer. Purchasing a home is an investment and you want to make sure that you're not paying more than you need to for your first property.