What You Need to Know BEFORE You Move
Whether you’re relocating across the street or across the globe, moving can be a daunting task. Before you jump right in, take some time to consider the following:
Why are you moving?
Before you start filling your weekends with open houses, ask yourself why you are moving and what you want to accomplish with this move. While a new job across the country might be the obvious reason, there are many other factors that you should consider. Bigger yard? Less maintenance? First home? Closer to school, work or amenities? Different city or neighbourhood? All of the above? It’s good to think this through and write down what you want both in terms of location and the home itself. Then separate your list into “must-haves” and “nice-to-haves”. This will help you prioritize what’s important and help your real estate agent find you the perfect gem.
Rent or Buy?
Unless you have recently won or inherited a large sum of money, there are two things you will need if you want to buy a home: 1) a down payment of at least 5%; and 2) the ability to qualify for a loan for the remaining amount. Without these, renting is the thing to do. There are, however, other reasons to rent instead of buy. If you only plan to live somewhere temporarily, or don’t want to worry about home maintenance, renting can give you greater flexibility. Buying comes with the benefit of building equity in your own home and greater stability in the place you live.
How much can you afford?
Once you know what you want, you need to find out what you can afford. Whether you’re planning to rent or buy, online calculators can help you know the general range you could qualify for, but they are typically quite conservative.
If you are looking to buy a home, it’s never too early to talk to a mortgage broker as there are MANY factors that go into determining what you could qualify for and they can vary from lender to lender. A broker typically represents multiple lenders and they can walk you through the factors that need to be considered with each. Remember, just because you have $20,000 in your bank account, it doesn’t mean you have $20,000 for a down payment. There are other moving costs that will need to be taken care of as well.
Once you know what monthly mortgage or rent payments you can afford, take a look at your other financial goals. If you purchase or rent a home at the very top end of what you can afford, you may not be able to take that dream trip to Hawaii or maximize contributions to an RRSP for the next few years.
Need help getting started? Search our directory of Real Estate Agents in your area and they will help guide you through the process.
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