Buying a home is a huge step, and the thought of home ownership appeals to the majority of the population. But are you ready? A home is one of the largest investments that someone will ever make, and it’s also much more permanent. Here are five different things that everyone should consider before they decide whether they’re ready to buy a home or not.
#1. Affordability. A quick way to determine if you can afford a home is by checking to see if the home’s price is under two-and-a-half years’ worth of your salary. This doesn’t work for everyone, but it can give you a decent idea of whether you’re in the right place financially.
#2. Location. Homes in the city of Toronto are generally higher priced than those in the suburbs. If the commute is something you don’t mind, it may be worth it to save money by looking outside the city. However, being closer to the city, certain schools and family may be more important to you and worth the cost.
#3. Your Credit History. Lenders will use your credit score to quality you for a mortgage and may also determine your interest rates using this number. It’s not uncommon for there to be mistakes on your credit report affecting your score if you’ve never checked it, so grab a copy online for as little as $20 from a company like Transunion or Equifax. They may also indicate certain things you can work on, like paying down existing debt, which will increase your credit score.
#4. Work. Is your current job steady and long-term? Being able to stay on top of your monthly mortgage payments is vital for both your emotional and financial well-being.
#5. Get Help. Meeting with a real estate agent before you decide to jump into the market can be a great way to make sure you’re on the right track before you buy.