Owning a Home
Owning a home is a dream for most people in Canada. PrimeWest sees many advantages to home ownership including:
- Joining a community and building a stable future for your family
- Increasing personal net worth as home value increases
- A real estate investment is the start of a financial plan
- Owning a home gives you more opportunity to customize your living space to your needs
- Property crimes decrease when more people in a neighbourhood own their homes
There are responsibilities involved in owning a home that you must also take into account when thinking of buying your own home, for example:
- Maintaining and fixing everything both inside and outside the home
- Taking the time to keep the yard neat and safe
- Paying for insurance so that your investment is protected
- Purchasing the equipment needed to maintain your home (appliances, lawn mower, etc.)
- Making payments on a regular basis to keep your home
- Your credit rating (or Beacon Score) is a number that lenders use to decide whether or not you should get a loan. When you pay your bills on time and don’t have too many credit cards, you will probably have a high credit rating.
- For many reasons, some people get behind on their loan payments or don’t pay their bills so their credit rating drops. If this has happened to you, start paying your bills and make payments on time and your score will improve.
- Most lenders don’t like to give mortgages to people with a low credit rating.
How much can you afford?
Many people try to buy a house that costs the same amount as the mortgage that they are approved for. This is backward thinking and often gets people in financial trouble.
Look at how much money you spend on the necessities every month. If you are currently renting an apartment, can you make the rent payment every month? If you can make the rent payment, are you struggling to make other bills or payments? If you are spending more money than you’re making, you will have trouble owning a home.
Get household spending under control. This will show lenders that you are serious about owning a home and it will also help you afford a better home.
The price tag of the house is not the only cost that you have in buying a home. Find out if you need a down payment. There will be “closing costs” or legal payments to make when you actually buy the house. Things like taxes, insurance and utility deposits also add up when buying a home.
