Pattie Lovett-Reid: The fear of buying your first home
There are so many negative headlines around the housing market that it is natural for prospective buyers to hit the pause button and re-evaluate their thoughts and buying intentions. According to TransUnion, four in 10 are fearful of their home buying potential and yet roughly the same number say they will be in a position to buy in the next five years.
The fear of buying surrounds everything from rising prices to land transfer taxes, and is especially pronounced in the hot markets of Ontario where 50 per cent said they were fearful, and 52 per cent of respondents in B.C., compared to 34 per cent in the other provinces. Atlantic Canada and Quebec were the least likely to agree that media headlines were going to sway their buying decisions.
Demographically speaking, millennials were the generation most affected by negative headlines – 56 per cent were fearful while 55 per cent still felt they would be in a position to buy in the next five years.
Manitobans were the most likely to agree they will be in a position to buy in the next five years (48 per cent), followed by Ontarians (46 per cent). Forty-four per cent of Albertans said they’d be in a position to buy in the next five years, while B.C. trailed at only 39 per cent.
Interestingly, men were more likely to say they would be a position to buy in the next five years than women.
Given the fact there is concern [over home prices?], these statistics suggest Canadians remain optimistic they will be in a position to buy a home within five years. TransUnion suggests this might be the perfect time to help prospective buyers get their credit and financial life in order. A healthy credit score can be the difference between getting a mortgage or not, or receiving a favourable or unfavourable interest rate.
Are real estate headlines keeping you from buying a home?
TransUnion offers up these five tips to improve your odds of getting into the market and getting a good rate:
1. Check your credit early. At least three months before shopping for a home to allow time for credit building if needed.
2. Learn the factors of credit health. Apply for a secured credit card, keep your credit balances low (light use of cards is a good approach) and pay your bills on time.
3. Do your homework. Research loans, rates and brokers to determine what you realistically can afford.
4. Take your time. It takes time to find your dream home and time to build your credit.
5. Have a contingency budget. There are a lot of financial unknowns so have a little money set aside for surprises upon move in.
For most Canadians, financing a home is the biggest financial decisions of their life. It is okay – even preferable – to be a little fearful. It will make you a more informed buyer.