First things First
The home financing and mortgage regulations have changed in recent years so it’s important that you investigate the rules of your province. In most cases you can no longer purchase a home without a down payment of some sort. For first time buyers this can be as little as 5% of the home price, and for subsequent buyers it must be at least 20%. Although it may seem obvious, the first rule for deciding when to buy a home is ensuring you have all your finances in place, this includes your closing costs which are generally estimated at about 2% of the budget you are shopping within.
Is now the time?
Assuming you have all your finances in order, you may be wondering if now is the right time to buy – or if there is ever a right time to buy. Deciding when to buy a home is important, and there are good times and bad times to buy. One thing you can do on your own is research the real estate market you plan to shop in. With very little effort you will be able to see if it is a buyer’s or seller’s market. Both home prices and availability of homes for sale will indicate if it’s a good time. If prices are high and houses aren’t lasting on the market long (slim pickings) then it’s a seller’s market and may not be the optimal time for you to buy. If you don’t absolutely need to buy a place, it may be worthwhile to wait.
A buyer’s market is when there is plenty of selection available and the list prices of homes are less than what they used to be for any given area. A buyer’s market tends to happen gradually, sometimes due to interest rate fluctuations or major government issues, but it’s always a newsworthy topic so you will definitely hear about it if housing prices begin to drop. Knowing when to buy a home and waiting for the right time can mean the difference between a good and a great investment.
Talking to your financial advisor about when to buy a home, or when you will be able to afford, or even how you can go about saving up for it, is a good idea. They will help to steer in the right direction with unbiased advice.