Owning a home is a lifelong dream for a lot of people. They’re excited about putting down roots and building equity. If you’ve always wanted a place of your own, and you think you’re ready for the commitment, here are a few questions to ask yourself to be sure that it’s the right move for you.
1. Are you good with money?
Be honest with yourself and think about what it means to take on the long-term commitment of a mortgage. You need to be confident that you can keep up with payments, cover the expenses that come with owning a home, and have money set aside for emergencies. There are lots of online planning tools that can help you estimate the cost of home ownership, like this calculator on RateHub. Plus, your friends and family can be a great source of real-life advice on what it really costs to maintain a home.
Estimating the cost of repairs
Your emergency fund should allow you cover these unplanned expenses.
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Furnace $3-5,000
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Roof $5-15,000
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Air conditioner $2-4,000
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Foundation repair $4-9,000
These costs will vary based on the size and age of your home. A home inspection will help you estimate these costs.
2. Are you ready to put down roots?
Think about where you are in your job, the type of job you have, and your social life. For example, digital nomads (people who work remotely) may prefer the freedom and excitement of relocating or living a life abroad in many places. Buying a home won’t prevent you from moving, but it can get expensive and complicated if you move a lot. You may have the option of renting your home to someone else while you are away, but not everyone wants someone else living in their space. Now is the time to ask: where do you see yourself in five years and do you want to commit to one town or city?
3. Can you DIY?
Condominiums come pretty close to maintenance-free living because your fees cover the upkeep of common areas and contractors will take care of the heavy stuff, like snow removal and lawn care. But when you own a house and you need to fix things, hiring professionals may not be in your budget. If you’re handy, and you like the idea of learning to maintain a home, it can be very rewarding. Be sure to ask yourself if you are ready to put in the work, pay the costs, and take the time to make a house your home.
4. Is now the best time?
In most places, house prices tend to go up over time. You’ll need to think about:
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How much you have saved for a down payment?
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Can you afford to live in your preferred neighbourhood?
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Is it the right time to buy?
Hopefully, you’ve been saving for a down payment towards a home. The larger your down payment, the smaller your mortgage will be. To see what your payments could look like, based on how much you've saved, try our mortgage calculator. To help you save faster, explore the benefits of Meridian’s First Home Savings Account (FHSA).
Starting off in a more affordable home or neighbourhood could be the best way to take your place on the property ladder and begin building home equity. Or, you may want to wait and spend a little more time saving so that you have a bigger down payment, which can help reduce the amount you have to borrow and make your monthly payments more affordable. There are programs to help first-time home buyers, so make sure to check those out.
Planning for owning your first home is an exciting time and these are important questions to ask yourself before you take on the responsibility. There are many online planning tools to help you understand where you sit, but consider the advice of a qualified mortgage specialist to help you to run the numbers, think about your options, and help you make the right decision.
We’re here to help
Whether home ownership is down the road or around the corner, it helps to have expert advice, while saving and planning for the future. We’re here to help.
Learn more about home ownership
Advice for first-time home buyers
What the mortgage stress test means for you
5 things you need to know about getting a mortgage if you're self-employed
First Home Savings Account (FHSA) vs Home Buyers' Plan (HBP)
