Think you’re ready to become a homeowner? Here’s how you can tell!
1) You have a budget
Factor in homeowner’s insurance, property taxes, fees, maintenance costs, and the best available mortgage rate.
2) You have a sizeable down payment.
Traditionally, you’ll need a down payment worth 20% of the home price.
3) You have a reliable source of income.
Buying a home is a long-term financial commitment, so you’ll need consistent cash flow to cover those mortgage rate monthly payments.
4) You have an emergency savings fund.
If you have enough cash to cover three to six months of your living expenses, you’re one step closer to being prepared.
5) You have your debts under control.
Lenders like to make sure you’ll have enough money each month to pay your obligations. Before they’ll give you a low mortgage rate, they take a look at your debt-to-income ratio.
6) Your credit report is in good shape.
You don’t have to have perfect credit to become a homeowner, but a decent history can help you lower the interest payments on your Canadian mortgage rate.
7) You can make a long-term commitment.
Are you ready to stay put for at least three to five years? Typically, that’s how long you’ll have to keep the house in order to recoup your buying and selling costs.
8) You are prepared to become your own landlord.
Don’t buy simply because you can. You need to make sure you’re ready.