Red Portfolio Home > Reaching Your Goals > Saving for a Home
Home sweet home.
Such a sweet sound.
Should you buy?
Just because all of your friends are buying homes, doesn’t necessarily mean it’s right for you. (Remember what your mom said about jumping into a lake...) You need to sit down and see if, financially speaking, it makes better sense to rent or buy. Your monthly rent, property tax, homeowner’s insurance, how long you plan to live there before selling can all affect this if you want to buy or rent your home.
If you know buying is for you, don’t wait. DO it. A house isn’t just a home, it’s an investment. And even if you’re planning on living there for five years, you’ll be building equity for yourself instead of your landlord.
Start putting it away.
We’re not talking about your belongings, but the money you’ll need for a down payment. That being said, the more money you can manage to put aside for a down payment, the more purchasing power you’ll have. Plus, you’ll need to have some money on hand for closing costs.
Let the search begin!
When it comes to house hunting, it pays to do your homework. Make sure you’re up to date on recent home sale prices, market trends, houses on the market and neighbourhood statistics.
If you have a good concept of the current market conditions, you’ll position yourself better as a buyer. You should know whether your in a buyers market (housing demand is low and supply is high) or in a sellers market (where housing demand is high and supply is low). In a buyers market you have room to negotiate your price. In a sellers market it could take a full price offer and sometimes even an over the listing price offer to beat the competition.
Fast Fact!! Costs in addition to the purchase price of the home, such as legal fees, transfer fees and disbursements, that are payable on closing day. They range from 1.5% to 4% of a home's selling price.²
Consider opening a separate savings account that can’t be easily accessed (via ATMs, for example) as your new-home nest egg. Then make a commitment to deposit money in it monthly. If you’ve just paid off a credit card or a car or school loan, consider putting the money you’d normally pay to them into your house fund.
If the house fits…
Be realistic in the house you buy. Obviously, you want to be happy where you’re living, but make sure you’re living with a mortgage payment that lets you enjoy other aspects of your life.
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