Should I Buy A House in 2013?• Some prospective homeowners don’t seem to pay any mind to the market conditions when they feel ready to buy a house. They just lunge forward with their eyes on the prize and let the chips fall where they may. However, there are those who prefer to exercise patience and wait until they can derive the most benefit from of the situation.
• If you’ve been wondering if 2013 should be the year for you to dive in and buy a house, keep reading for some useful tips and information.
The Bank of Canada• Most people who are considering buying a house won’t even consider the Bank of Canada, but their yearly forecast does help to set the real estate market. For 2013, it was announced that the key policy interest rate will remain at one percent. The forecast for economic growth is for the Canadian economy to grow by about two percent in 2103. In all likelihood, a stable housing market will mean no interest rate increases throughout the year.
The Real Estate Market• Some prospective home buyers will consult the CMHC real estate market forecast before deciding if 2013 is the year to buy a new home. The CMHC pricing forecast for 2013 says the average MLS price will be between $358,000 and $395,800 across the country. Of course, this will vary depending on where you live and what you’re looking for, but it can act as a guideline or gauge. You’ll also need local numbers and averages to know what the environment will be like in your specific part of the country.
Running the Numbers • Running the actual numbers that pertain to your situation is one of the best ways to know if 2013 is your year or not. Even if the interest rates are favorable, home prices seem modest and there is a decent supply, if you can’t afford it then it probably isn’t going to work.
Running the Numbers• When you work out the numbers, you’ll have to consider your household income and expenses, current credit debt, property tax and the mortgage payments. There’s also the matter of the down payment.
The Down Payment • There have been times when a down payment wasn’t required to purchase a home, and you may still be able to find promotions or deals where you can get yourself a house with zero down. However, most experts will advise having a down payment of up to 20 percent to make the deal happen. Five percent is often the required amount that you’ll need to make the deal happen. That would mean a down payment of $15,000 for a $300,000 home.
The Down Payment• Ideally, that down payment will come from money that you’ve saved and won’t have to pay back, but that isn’t always the case. Many home buyers turn to other forms of credit to secure the down payment, which may or may not be a big deal depending on their credit situation to begin with. There are rules about borrowing your down payment from credit, and your lender may have the ultimate say on whether this is an option.
The Down Payment • In some provinces, cash back down payments are still in play. Basically, the lender will give you five percent cash and you can use that as your down payment. Not many places still do this, and there is talk of it being taken away completely, but for those that can use it, it may be an option.
The Down Payment• There are also options like having the down payment gifted to you, borrowing from your own retirement savings plan or exploring different government programs. Whatever the end choice, how you make the down payment and how much you have to pay will certainly be a factor in whether you buy a house in 2013.
Are You Pre-Approved?• If you really want to know if you should buy a house in 2013, you should go get pre-approved for a mortgage first. Pre-approval points you in the right direction and lets you know where you should be looking. You’ll know how much you can spend, how much you need to spend as a down payment and it just saves a lot of time later on. It is extremely frustrating to make the decision to buy and go through the motions only to discover there is something holding you back from getting a mortgage. Once you make the first move, you want to be sure that you can see it through to the end.
Further Reading…• Josh Reso is Orangeville Ontario’s real estate leader. Visit http://www.joshreso.com/ today to view available listings.