Factors to Consider When Buying a Home in Proximity to a Community Space
Eliminate Outstanding Debt
It is estimated that the total household debt of Canadians is in excess of $2.5 trillion, with mortgage debt representing more than 68 per cent of this total figure.
In the face of high – and rising – home prices, first-time homebuyers’ mortgage debt could be considerable. As a result, it is crucial to first minimize or eliminate outstanding non-mortgage debt, from credit cards to car and student loans.
By decreasing your debts, you can then concentrate on either saving a bigger down payment or contributing more to your monthly mortgage costs.
Speak with a Financial Advisor First
Before you go house hunting and apply for a mortgage, it would be prudent to book an appointment with a financial advisor or speak with a mortgage broker. By doing so, you can receive professional advice from someone who can help you determine if you’re eligible for a mortgage. This will save you the stress and headache of a barrage of mortgage applications.
Budget What You Can Afford
In today’s sizzling real estate market, many prospective homebuyers may feel defeated by rising valuations, tempted to abandon their budgets and purchase whatever is available, even if it is beyond what they can afford. But is this fiscally responsible? Could you afford an emergency, if something came up?
Prioritize your finances, be it for your retirement or your child’s post-secondary education. Budgets are a necessary tool to accomplish long-term prosperity.
Work with a professional real estate agent who can point you to housing types and locations that are aligned to your budget. And if you still can’t afford it, you may choose to wait until you’re in a better financial position.
What’s In Your Credit Report?
Have you checked your credit report lately? If not, perhaps it is time to take a look, even if you are not in the market to buy a residential property quite yet.
Take some time to check your credit score and if needed, improve it. Your credit score ranks your financial health on a scale between 300 and 900, and indicates the level of risk you pose to the lender. The higher your score, the lower the risk and the higher the chance you’ll secure a better mortagage rate or terms.
Unfortunately, your credit score could become a victim of identity theft or fraudulent behavior among unscrupulous individuals. For example, somebody might take out a loan in your name. Or as another instance, your first and last name could be used for a new credit card.
Whatever the case, your credit rating could take a hit if you are not being vigilant and proactive.
Ensure You Have A Sufficient Down Payment
One of the biggest hurdles to buying a home is saving a sizable down payment. Since home valuations have surged considerably in recent years, it has become harder to gather enough upfront cash, especially in pricey markets such as Toronto, Vancouver or Montreal.
That being said, this is a critical part of the home-buying process. Unsure of the dollars and cents? Here is what you need to know ,based on your home-buying budget:
- Less than $500,000: A five-per-cent of the purchase price in the minimum down payment
- $500,000 to $999,999: Five per cent of the first $500,000 and 10 per cent of the purchase price above $500,000
- Over $1 million: 20 per cent of the total purchase price
Moreover, if your down payment is less than 20 per cent, you will be required to purchase mortgage loan insurance, which can be paid up-front or added to your monthly mortgage payment.
Eliminate Outstanding Debt
It is estimated that the total household debt of Canadians is in excess of $2.5 trillion, with mortgage debt representing more than 68 per cent of this total figure.
Community Engagement
Look for community spaces that actively engage with the surrounding neighbourhood and offer opportunities for residents to get involved and contribute to their community.
Quality and Maintenance
Assess the quality and maintenance of the community space to ensure that it is safe, clean, and well-maintained. Poorly maintained community spaces can be less attractive and less likely to be used.
Accessibility
Consider the proximity of the community space to your home and how easily accessible it is. A community space that is too far away may be convenient and less likely to be utilized.
Type of Community Space
Different community spaces can provide different benefits and amenities. Consider what activities and amenities are important to you, and look for community spaces that offer them.
Quality and Maintenance
Assess the quality and maintenance of the community space to ensure that it is safe, clean, and well-maintained. Poorly maintained community spaces can be less attractive and less likely to be used.
Accessibility
Consider the proximity of the community space to your home and how easily accessible it is. A community space that is too far away may be less convenient and less likely to be utilized.
Type of Community Space
Different community spaces can provide different benefits and amenities. Consider what activities and amenities are important to you, and look for community spaces that offer them.