Before you go on to purchase your new Halifax home, it is important that you keep these things in mind:
How long are you planning to live in your new Halifax home?
If it is likely that you’ll get a job transfer pretty soon, or you are going to move somewhere else in a short period of time, buying a home in Halifax might not be the right option for you. This way, you will only end up paying the money to sell this new home. Within this short span of time, the value of your new home may not have appreciated, so you won’t have enough to cover the costs which were paid by you in order to purchase this new home.
The economic factors in your area will decide how long it takes for you to cover the costs. In Canada, the average rate of appreciation is 5% per year, which means that you should stay in your new Halifax home for at least 3-4 years before making a decision to sell it. Then only you might be able to cover the buying and selling costs of this property. Now, for some reason, if the area around your home goes through an economic upturn, you might be able to cover up the costs sooner, and vice-versa.
Will your home meet your long-term needs?
What type of features do you want in your new home to compliment your lifestyle? What will your lifestyle be in 5-10 years from now? You need to make sure that your new home has the amenities that you require.
Generally, a 2-bedroom home is perfect for young couples without any children. When they raise a family though, this space simply might not be enough for them. This is why, when you are buying a home you should consider the ones where there is room to grow. Ask yourself, can you turn the basement into extra bedrooms? Would it be possible to turn the attic to a master suite? If you have a good idea about the things that you’ll need in the years to come, you can easily opt for a house that will satisfy those needs for you.
As per your financial situation, is it the right time to buy a home?
Can you afford a new home financially? Is your financial condition and credit score good right now? You may be thinking that you will easily find a lender, but good lenders only lend money to people with good credit scores. Usually, if you have one or two blemishes on your credit report, you might be able to qualify for lowest rates; however, if you have more than two blemishes, the lenders might charge your higher rates.
It is recommended that you avoid yourself from borrowing the entire amount that you qualify for; it is never a wise decision to stretch your financial boundaries. But at the same time, people will also tell you that you should buy a home for all that you can afford; as the potential of earning is increasing everyday and if you pay big today, you might have to pay relatively less tomorrow. In the end, it is totally your decision. Just make sure that whichever decision you make, it makes you feel comfortable financially.
If you are interested in knowing how much home you can financially afford, you can talk with a professional lender. You can also just go on the internet and use the home affordability calculator. If you use a good calculator on a reliable website, you will get the right range of the money that you can borrow. Afterwards, you can call the lender and he will customize the loan depending on your personal situation.
Do you know where the transaction money is going to come from?
As a homebuyer, you need the money for down payment and to pay the closing costs. Do not worry though, because today loans are available in broader options and so it is not always necessary for you to have a lot of money saved for the down payment i.e. if you appear as a good financial risk to the lender. Your credit score doesn’t have to be the best; if you have 10 – 20% saved for the down payment, you are still a good financial risk for the lender.
Can you deal with the ongoing costs related to home ownership?
Ongoing costs such as maintenance, taxes, insurance, etc… are all added to your monthly house payment, are you ready to afford these costs? In some cases, where you buy a condo, or a home in a community, you might also need to pay an amount monthly to the homeowner’s association. There are ways to lower down these costs; however, you need to let your realtor and lender both know that you are looking for this option.
Still quite unsure about your decision of buying a new Halifax home? Then you should get in touch with a financial planner who will first assess your financial situation and then advice you how the purchase of a new Halifax home can fit in your long-term financial goals.