Deciding when to buy your first home can feel overwhelming. If you’re struggling with the decision, here are some clear signs that you might be ready to transition from renting to owning:
- Your Credit Score is Looking Good: A credit score of 680 or higher puts you in a strong position to secure a mortgage. Maintain good credit habits to keep or improve your score.
- Your Down Payment Savings are Stacked: In Canada, you need at least 5% down for the first $500,000 of your home’s purchase price, and 10% for any amount between $500,000 and $999,999. If possible you may opt to save 20% or more to avoid mortgage default insurance, and also lowering monthly payments by extending amortization. Tools like the FHSA can help boost your savings, whether you’re aiming for the minimum required or going beyond. Recent changes to rules around RRSPs can also prove to be helpful.
- Your Income is Locked In: Stable income over the past two years is crucial for securing a mortgage. Lenders want to see a reliable history and future expectations of income. Ensure you have all income verification documents ready when applying for a mortgage.
- You’re Ready to Put Down Roots: Buying a home is financially sensible if you plan to stay for at least five years. This timeframe allows you to recoup your investment and benefit from property appreciation while building lasting community connections.
- You’ve Got a Mortgage Pre-approval in Hand: A mortgage pre-approval tells you exactly how much you can afford before you start house hunting and signals to sellers that you are serious and financially prepared. This can give you a competitive edge, especially in hot markets.
Thinking About Buying? Let’s Talk!
It’s challenging to pinpoint the perfect time to enter the housing market. If these signs resonate with you, it might be your cue to start. I chat with new home buyers daily, and these factors are common among those ready to take the plunge. If you see yourself in these points, why not reach out? We can discuss your options and get the ball rolling on your journey to homeownership.