One of the top questions I hear my Realtors being asked is, “Should I buy or should I wait?” There are a lot of factors to consider when answering this question, so we can't just offer a cookie cutter reply.
Affordability, job stability and relationship stability if you are planning to buy as a couple... Our advice? If you are planning on staying put for at least five years and are stable in your job and relationship – then you should look at buying. If you are transient in nature, and still have a bit of “wild child” left in you – stay renting.
A recent Ipsos Reid Poll came back with some pretty staggering numbers: 17 % of current renters were confident they could buy soon while 83% said they just can’t afford it.
A common misconception is that home ownership is the path to independence and financial prosperity. According to a study from the director of the UBC Centre for Urban Economics, it isn't necessarily a path to future wealth, but then again, neither is renting without careful saving.
This doesn't surprise many market research experts. I feel people just need to curb their expectations. Don’t think you can just jump from renting an apartment into a 3,400 Square foot, custom built home in Cameron Heights… You will have to start in a starter townhouse or condo and move your way up. And this isn't the 1980’s anymore; it’s probably not going to happen as quickly as it did for your parents.
- You need a down payment of at least five per cent. But banks prefer first-time home-buyers to have an average of 10 per cent down. If you put less than 20 per cent down, you’ll be hit with mortgage default insurance.
- Experts recommend setting aside 1 – 2% of your after-tax income each year to a “house maintenance fund.”
- Fixed costs are basically everything you have to pay each month whether you like it or not: car loans, credit cards etc. Keeping them below 50-60% of your after-tax income is key if you want to avoid becoming “house poor.”
I will be writing a blog post shortly about the do's and don’ts of buying your first home, but the gist of it is:
1 – Get pre-approved for your mortgage
2 – Find a Realtor ®
3 – Stay mindful of your budget
4 – Be open to your Realtor's® recommendations
It’s a very personal decision but we are here to help guide you in your path towards home ownership if that is what you are looking for. Give us a call and we’ll match you up with an incredible buyer specialist.
Be sure to check out the newest homes for sale in Edmonton through our new and improved Edmonton MLS listings.
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