Buying a home is a dream many Canadians aspire towards. Within the past few months, the number of non-homeowners in Canada that wanted to buy homes jumped from just 7% before the pandemic to 27% today, according to a survey by Mortgage Professionals Canada. Participants of the survey said becoming a homeowner has become a greater priority due to the security owning one’s own home brings.

If you aim to become a homeowner, you need to make smart choices. With the right planning, you can save money, secure a good place to live, and provide yourself and your family with a more comfortable future. To guide you through the process, we’ve listed a few of the best questions you should ask yourself before buying a home.

Can you find a trusted realtor?

Real estate agents work for the interests of house sellers since that’s where they get their income from. It’s therefore important for you to look for agents with honesty and integrity, who will bring you the right options based on your needs and preferences. In The Book on Rental Property Investing, entrepreneur Brandon Turner states that the best way to find a real estate agent is through referrals. It may also help to find agents that are connected to professionals that can help you through the home buying process, such as mortgage lenders.

Does the home suit your future needs?

How long do you plan on staying in your home? If you have a specific duration in mind, think about how well that home can serve you from the beginning to the planned end of your stay. For example, if you don’t have kids now, but hope to have some in the future, you might want to check whether the home you plan on buying is located near good schools. Alternatively may look for a neighbourhood that is safe enough for young children to play in.

Some of the basic features you should consider are the location, size, age, and layout of the house. Additionally, if you don’t plan on living there permanently, try to determine whether the property would be easy to sell in the future.

What will your debt to income ratio look like?

In 2016, the famous For Dummies manual series published a new edition of Home Buying Kit For Dummies, which provides pointers on the home-buying process, including how to select mortgages. According to the manual, mortgage lenders will only tell you how much you’re allowed to borrow, not what you can afford to borrow.

A good way to determine whether you can afford a mortgage is to look at your debt to income ratio. Your debt to income ratio (DTI) tells you how much of your income you have to shell out each month to pay your mortgage. For example, if you have a DTI of 30%, that means you can allocate 70% of your income to cover other monthly expenses. To see if a mortgage is affordable, assess whether your DTI can give you enough money to maintain your standard of living.

What are the additional costs?

You don’t want to get blindsided by unexpected fees. Before you start the home buying process, do research on what additional costs you may end up spending. Closing costs include title insurance, title tax, application fees, appraisal fees, credit check fees, underwriting fees, and any applicable transfer tax. Then, take note of any ongoing costs you might incur once you’ve acquired your home, such as property tax, homeowners association fees, and repair and maintenance costs.

Buying a home can be a complicated process. Once you’ve covered all your bases, protect your home by acquiring homeowners insurance. Bauld Insurance Advisors can help Nova Scotia residents customize a home insurance policy that meets their needs.

~ Written by guest blogger – Amelia June

Article intended only for use by Bauld Insurance