Owning a Home Has its Challenges; this article talks about how to overcome them
CBC recently ran an article about the “Increasingly Narrow Path to Home Ownership.” Maclean’s Magazine also published a lengthy article of the difficulties for first time buyers, which include:
- Increasing rents making it harder to save;
- Seemingly no end to housing price increases;
- A shortage of housing stock; and,
- Increasing interest rates.
In addition to the challenges of getting into the housing market, there are many challenges that current homeowners are facing in today’s market.
Here are some ideas and strategies we have seen prove themselves valuable to help you overcome those challenges:
Paying top dollar for a rental unit does make it harder to save.
Whether it is making a decision on where to rent or watching the other money that is coming out of your account, finding a way to save where possible if home ownership is your goal is key. If home ownership is the goal in the next 5 years, compromising on where you rent in the meantime could mean the difference between having no cash left to save at the end of the month and having a pile that continues to grow.
In addition to the expense of renting, we’ve read it is important to watch where you shop (groceries is a good example). Bi-weekly or even monthly to start, going through your bank and credit card statements to see where you’re spending makes it easier to see what can be cut and manage your spending. Leaving more room for saving each month.
Pay yourself first
Many have heard this before, but putting aside 10% of your take home pay into an RRSP or TFSA on the same day you get paid is a great way to never even “miss” the money. In a world where so much can be automated, make sure where it makes sense, your money is too.
There’s also a new program in addition to RRSPs and TFSAs for first time buyers to save for a down payment. So it’s important to make yourself aware of what programs are around in 2023, to make sure you’re taking advantage of what is available to you.
Lastly, we’re also seeing many parents give their children an early inheritance gift that helps with a down payment. If you believe this may be an option for you to receive or to provide for your child, have the conversation early to see what can be saved by the other party to help meet that downpayment goal sooner.
While housing prices have continued to rise, it’s also important to look at locations with access to transit that can get you to work. It’s less expensive to buy outside Metro areas like Guelph, Kitchener, Waterloo, Cambridge and the surrounding areas.
If you have a job where you have an in office and remote blend of work, purchasing further from home and along the route of transportation options may be the best option for you.
Have an Open Mind
In a market that is changing frequently, it is important to manage your expectations. The attitude about moving up the property ladder starting with a condo, can help you get into a home sooner than purchasing a detached home. If a condo doesn’t work and you have the budget for a home that is not quite move in ready, we have many clients who bought something with worn carpets and linoleum floors and overtime they made those homes beautiful.
There is a shortage of housing stock and increasing interest rates, making it even more important to get pre-approved with a mortgage professional.
Be sure your tax information is readily available, and your finances are organized
Whether you’re buying your first home or moving into your next, we love helping people get mortgages approved and organize the financing when you’re buying a home (even if you’re not comfortable or don’t understand the details).
At The Mortgage Centre our advice and expertise helps make your decision to move easier. So if you have read this and think you want to take that next step towards home ownership, book a free virtual call with us to find out more about what you qualify for with today’s rates.