How much will it cost to buy and live in your preferred area?
When doing your research, it’s easy to find yourself sitting before a blank computer screen, wondering where to begin. Don’t worry, it’s totally normal – especially if you’re a first-time homebuyer. Start by researching housing costs in the area you’d like to purchase. Location impacts various costs to a huge degree, so be sure to factor geography into this math lesson.
First, there’s the price of the home. Research prices of active listings to get an idea of how much you’ll need to spend. Check out homes for sale on REMAX.ca, and your RE/MAX agent will also be able to pull recent home sales, to give you an idea of how much you’ll actually need to spend. Remember that asking price and selling price are two very different things!
Second, before you make an offer, be sure to calculate the cost of living in the area you’re considering. How much can you expect to spend on:
- Travel to and from work?
- Parking your vehicle?
- Property tax?
- Property/car insurance?
- Maintenance of the home?
Okay, you know the price. Now what?
What about your personal finances?
Before you decide to buy a home, be aware of the reality of your finances. The decision to enter into home ownership requires more than simply a down payment and a monthly mortgage payment. A degree of financial stability is essential to realizing your dream of home ownership with confidence. Take some time to review your current monthly expenses, and then factor in the additional costs of purchasing a new home to see where your budget nets out. Home prices and interest rates will mean nothing if you aren’t prepared to not only purchase, but maintain a home.
Does your budget match the cost of home buying and ownership?
The last step is to determine if your budget matches up with the current cost of homes in the area you are interested in. If not, explore other areas, different housing options, or determine what financial goals you need to hit before making the purchase decision. If math and economics aren’t your strong suit, schedule a meeting with a financial advisor to ensure your finances are in good shape, both at the time of the purchase and into the future.
Building a budget may not be the most glamorous step you will take on your road to home ownership, but it truly is the most important. All good homes are built on a solid financial foundation that will help the home – and your investment – stand strong for years to come.