Whether you are 20, 30 or 40 years old, the purchase of a house is in itself a particularly important event, in the sense that it requires the investment of a large sum of money, among other things. In fact, the various steps surrounding homeownership generally generate a great deal of stress, particularly in terms of the mortgage loan.
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This is why many people wonder if they are really suitable for acquiring a home.
Here are five signs that will tell you if you are ready to buy a house… or not!
1) No savings for a down payment
In short, it is essential to give a good amount of money for the purchase, if only to reduce the amount to be borrowed and prove to the seller that the offer is serious. Also, be aware that to be comfortable and cover the ongoing costs of a home, you need to provide more than the 5% down payment required for CMHC financing or for conventional 20% financing.
Therefore, for a property worth $600,000, a 20% down payment would then be $120,000.
2) Not tempted to find out if you qualify for a mortgage
There are many mortgage lenders out there, all with different deals that can make a difference of thousands of dollars to your wallet over the years.
In short, if you haven’t taken the time to compare the various mortgage rate offers and financing conditions, or even sought the help of a mortgage broker specializing in the field, this means that you may not be -not ready to invest in buying a house.
3) Not pre-approved for a mortgage
Having such a pre-approval shows the seller of the property that you are financially fit to buy a home, but more importantly it gives an idea of how much you are able to borrow. Depending on the institution you are dealing with, you can protect your rate normally between 30 to 120 days. Finally, in which case the interest rates would be lowered while waiting for pre-approval, the lender will give you the lower rate.
4) Not thought about the type of house desired
Obvious to some, unimportant to others, but know that if you haven’t thought about the style, age, size or even neighborhood of your future home, it’s probably a sign that you don’t know. ‘re not ready to become an owner yet!
5) Credit score too low
To be able to buy a house, it is necessary that the credit score is normally higher than 650. It is possible that by using alternative lenders, an individual succeeds in qualifying for a mortgage, but at what cost?
Therefore, before buying a house, be sure to build an impeccable credit rating that will inspire confidence.
Tips
If you don’t have a down payment, a relative can give you a donation and it will be accepted by financial institutions.
If your credit rating is low, be sure to increase it, in particular by not exceeding your credit limit or by using only 35% to 50% of the credit to which you are entitled.