Calm Down Take Your Time
Rome was not built in a day.
Yes, the Prime Rate is going up and mortgage rates are going up. We created 93,000 jobs last month and the cost of homes decreased slightly year over year. Our economy is booming again! All of these are very powerful information that may cause your blood pressure to rise and stimulate your adrenalin.
Stop, take a deep breath and think this through before jumping into the housing market.
Just in case you are not quite ready I have a few things I would like you to think about:
• Have you been saving to buy a home?
• How long have you been at your present job? (You need to be in your present employment for 1 year – 18months (and not on probation.)
• Have you requested an employment letter from your employer?
• Have you check your credit report?
• Do you have any late payments or unpaid bills?
• Have you paid off all your revolving credit?
• How much money do you have to use for your down payment?
• Do you have a Registered Retirement Savings Plan?
• Did you know that your last deposit into your Registered Retirement Savings plan has to be there for 89 days before you can take it out to use as part of your down payment?
• Is your down payment liquid? And can you access it immediately?
• Have you decided what type of house you want?
• Do you know where you are planning to buy this house?
• Have you been to your bank to request a Pre-approval?
• Do you have any idea the mortgage amount you qualify for?
• Have you chosen a Real Estate Agent?
• Is he or she recommended by someone you trust?
• Have you chosen a lawyer?
• What are your closing costs (including your lawyer’s fees)?
• Do you know how much notice is required to give to your present landlord?
Before you begin your search, you should have answers to all of the above questions. If you are unable to answer them with confidence then you need to do some homework.
Remember: Don’t let yourself get caught in someone else’s wind. Mortgage rates are rising and you do not have to feel pressured to move quickly. Without a plan, moving quickly into something you did not plan for can create mountains of grief and turmoil.
This is, for most of us, the single biggest purchase we will ever make in our life time so take the time necessary to make the best of it. Prepare your plan for purchasing your home.
Use the above questions to help you realize whether you are ready to make the purchase. The points above will certainly help you make the right choice at the right time not when someone else is making their plan. Start with the following:
• Create a Plan – a SMART Plan.
• When do you want to buy this home?
• Where? Location?
• Why? (E.g. I am tired of renting.)
• What type of home?
• What will it cost you, how much you want to spend?
• Who is involve, are they also ready to buy a home?
These are things to consider before beginning your plan to purchase. There may be some things you have taken care of already and there may be some items you just found out about. I recommend that you purchase a note book or a device to record your notes (e.g. your phone), whichever you are most comfortable with to write things down as you go along. This applies whether it is just a thought or a question you have for your bank, a friend or family.
First check the website of real estate companies to look at houses for sale in the area you want to live in. You can take a virtual tour to check the sale price and the various styles of houses or condominiums. I would stay away from going to an OPEN HOUSE until all your ducks are in a row. Failure to do that might cause you to make a decision you will regret for a very long time. Open houses could cause sales pressure by the listing agent and if you are not prepared, things could get out of hand very quickly.
Buying a home is a wonderful experience and you want to keep it that way. When you have made an offer you want to feel confident that you have done the right thing. This will also prevent you from not staying up late at night questioning what you have just done.
If you have followed the points I gave you, I know for sure you will be extremely happy with your decision to purchase your home at the right time for you.
Go ahead you are ready.
Tessa- Marie Shillingford is the author of Controlling the Debt Monster. She is Personal Financial Planner, with a designation from the Institute of Canadian Bankers, and a Financial Counselor certified by the institute of Canadian Banker. She is presently a Program Facilitator of Financial Literacy at JVS Toronto. Tessa- Marie was employed by TD Canada Trust for twenty years in the retail section of the bank. During her tenure at TD Canada Trust she held various positions interacting with customers of the bank. As a Financial Advisor and Manager of Financial Services she led a group of Financial Advisors in helping customers of TD Canada Trust successfully manage their finances. Details of her book… Controlling the Debt Monster, can be found at http://www.controldebtmonster.com</em