Thinking of Buying A Home? Be Prepared.

Posted in Money Tips
Posted by Wendy Young, CERTIFIED CREDIT COUNSELLOR

buying-a-homeThe prestige of home ownership is as powerful as ever. So says a study commissioned by Genworth Canada, a private residential mortgage insurer, undertaken in conjunction with the Canadian Association of Credit Counselling Services. This annual report polled 1,507 Canadians about various aspects of their financial well-being and preparedness.

“Despite tighter mortgage qualification criteria over recent years,” Genworth COO Stuart Levings said with the report’s release, “survey results point towards positive trends in home buyer behaviour.”

There are lots of cool revelations among the findings, including Canadians’ predictions for how long it will take them to save for a home and pay down their mortgage. Here are some of the highlights:

  • 90% of respondents say that owning their home gave them a greater sense of emotional well-being;
  • 90% concede that home ownership means more work and effort, but that they’d rather pay down a home than spend their money on rent;
  • 48% believe they’re in good or great financial shape, up from 44% in 2013;
  • 19% of first-time or intended buyers say now would be a good time to buy a home;
  • 50% of respondents say they expect it’ll take them between one and two years to save for their down payment, 29% believe it’ll take three to four years;
  • 53% say they’re worried they might miss the perfect house because they haven’t saved enough for the down payment;
  • 67% say their goal is to pay off their mortgage faster, up from 62% in 2013.

When Reality Trumps Perception

While all of these statistics speak well of Canadians and their grasp of their personal finances and realistic pursuits of home ownership, it’s important to bear in mind that a house purchase is not a one-time outlay. Owning a home is an ongoing fiscal burden at the best of times, and it’s always at the mercy of unexpected expenses (not the least of which might be a hike in interest rates).

More than that, you add some of life’s eventualities to the list, including children (hello, maternity-leave income cuts and the call for a third-floor addition), the loss of a job and a crumbling roof, and you’ve got a full-on argument for the need to plan ahead.

We often meet with individuals and couples who didn’t think far enough ahead when they made that first purchase. Enter a job loss and they’re scrambling to make their mortgage payments, not to mention, cover basic living costs. If a decrease in income is only temporary, stick with a plan, you can probably recover on your own. However, if you’ve fallen short on your monthly bills it might be time to speak with a licensed trustee’s office to learn about your options. Keeping your house is definitely one of them!!!

So buy a house, and be prudent in your planning for its purchase. But remember that your shelter-related money matters don’t end with your signing of the deed. Staying on top of your ongoing domestic obligations will make the pleasure of home ownership more pleasurable still.