Homeownership is something many of us aspire to, but there’s a big difference between having dreams and actually taking the steps necessary to reach them. Buying your first home can change your life—but it may also take some big life changes to get there in the first place.
I bought my first property when I was just 20 years old, and now, as a real estate advisor in Victoria, BC, I’m passionate about helping my clients achieve their real estate goals.
Keep reading for my advice for anyone trying to prepare for homeownership—whether you’d like to buy a home in a few months, or a few years.
How To Prepare For Homeownership
Perhaps you spend a lot of time daydreaming while you scroll MLS listings. Daydreams are great, but there are two big areas to tackle when you’d like to make them a reality.
Make A Smart Budget
Like I said, daydreaming is great, but figuring out how much you’ll actually need for your dream or investment home can be even better. Decide where you want to live, and along with any must-have features for your home. Size, location, and age all play a factor in how homes are valued. Do you need to have a pool? A finished basement? Good schools in the area?
Once you’ve answered these questions, you can more realistically gauge what your potential home will cost. That’s critical information, because you can use it to determine what a down payment might be. Knowledge is power, and when you have this knowledge, you can make a plan for your future that includes owning your own home.
Finally, note that the Canada Mortgage and Housing Corporation (CMHC) recommends that your monthly home costs (ie, mortgage and utilities) shouldn’t be more than 25% of your gross monthly income. You can use this when determining what your future budget should include.
Make A Smart Plan
Armed with all this knowledge, you can start to make a more realistic plan for your life and finances that will put you in the right position to buy.
First, it’s always best to plan for a bigger down payment. If it’s going to take you 5 years to save up enough—great. Now you know what you’re shooting for. 10 years? That’s ok, too. Just be honest with yourself, and with how you’ll need to budget for the next little while.
While you’re trying to save money, don’t take out any new major loans, work on your credit rating, and try to find new sources of income if possible. Again, hopefully you’ve done the work to figure out how much you need to save and/or earn to get the right home, which can help with figuring out how long you need to save (and what expenses you might need to cut).
When you’re ready to make the leap, it’s time to get pre-approved for your mortgage by the bank, and then we can start the fun process of helping you find your home! Whether you’re planning to stay put for a while or hoping to make a good investment you can leverage for a future forever home, I’m here to help.