How do gauge if it is the right time to buy a home.
My clients often ask questions like, “is it a good time to buy a home?” or “when is it a good time to buy a home?” but the question should be, “am I ready to buy a home?”
Purchasing a home offers security and can set you up for an early retirement so it is never a bad time to buy. In fact the response to the timing question of when is it a good time to buy is often answered with some sort of snarky remark like “five years ago.” Not the most helpful response, but with equity growth over time, it is often true.
A more helpful response to these common questions is “Now is a good time to buy a home, let’s figure out if you are ready.”
So, how do you know when you are ready to buy a home?
What follows is a checklist to audit your home buying potential.
- You’re past the age of majority in your province (in Nova Scotia, you have to be 19+ years of age to purchase property)
- You’ve got job security and are past any probation period at work.
- You’ve got at least a five per cent down payment saved. (or qualify for the provincial downpayment assistance program).
- You’ve built up strong credit with a 680-plus credit score, but preferably 720 or better.
- Your total housing costs plus debt payments are less than 44% of your gross income.
- You can prove enough income, or you have a co-signer.
- You’re a disciplined spender.
- You’ve done the math, and buying makes more sense than renting.
- You’ve developed an honest monthly budget.
- You’ve got access to three-plus months of living expenses, a.k.a an emergency fund.
This is not an exhaustive checklist, but if you check all these boxes, you probably should be buying a home. If you don’t, prepare an honest budget and focus on saving a little bit each month while you work on the other items.
For more home-buying tips and advice, follow me on Instagram or Facebook or send an email to arrange a personal call. I will answer your questions and help you get started.
