The Other 5 Ways to Know If You're Ready for a Mortgage
May 4, 2018 | Posted by: Ron Chan
Last week, you were asked to consider the four main things to indicate that you're ready for a mortgage in Winnipeg. The article discussed downpayments, monthly payments and mortagge rates, real estate market projections, and residency. You know, the boring stuff.
But as you know, there is more to it. There are less tangible but no less important things to consider, ones that other local mortgage brokers may not give enough attention to. I'm not like them. Instead, I'm here to help you look at the big picture, to help you make a more informed choice that includes a few things you may not have already thought about.
5 Other Things That Will Help You Determine if it's Time to Enter Into a Mortgage
1. Higher Rent is Coming
Forget winter is coming, nothing strikes fear quite like the prospect of inevitably higher rent. Sure, Manitoba keeps the annual increases in check, with the 2018 rent increase guideline set at 1.3 percent with an economic adjustment factor for 0.8%, but did you know that landlords can apply for a larger increase if they can demonstrate that the guideline amount will not cover cost increases they have incurred? With property valuations on the rise and new residential development moving in the same direction, property taxes will increase for many owners, prompting them to exercise that right.
And what about when your lease is up? We've all heard the stories, of rental property owners (more on some of them in item #2 below) threatening to take residence of their condo or townhouse (etc.) when the lease is up unless the tenant is open to renegotiation (read: rental increase). This is an unfortunately common tactic that allows them to avoid the annual rental increase limit imposed by the province.
Whichever the case, rental increases are as inevitable as taxes. If you're over it, you're ready for a mortgage.
2. Your Landlord Sucks
This is an obvious extension of the item above. The impending threat of rental increases aside, there has been underlying tension between tenants and landlords that dates back to the days of Jack Tripper vs Mr. Roper (maybe even before that). The feeling that someone calls the shots when it comes to how you live within a certain number of square feet weighs heavy on the soul. Whether you want a pet, want to replace carpet with hardwood, or hope to paint the walls aquamarine for the season, you probably have to get approval. And that's the standard stuff. In some instances, there are simply strong personality conflicts that can lead to irreconcilable differences that can drive an eternal wedge between a landlord, and you, the tenant. But when you own your home, all of that falls to the wayside, making mortgage rates a seemingly inconsequential trade-off.
3. You've Got a Bun in the Oven
Whether you have kids, have one on the way (congratulations!), or at least plan on it for the very near future, it is likley time for a mortgage. Not only do you want your kids to grow up in a place that the family can truly call Home Sweet Home, you want the homeowner luxury of notching their growth chart in their bedroom door frame, and all of the other things that would otherwise make a direct hit on your rental security deposit. In addition, the sooner you enter into a mortgage, the sooner you begin building real equity, which will serve you well when the time comes for your kids to head off to college/university. Buying a home early also allows you to build up their inheritance, giving you peace of mind that they will be taken care of in the far off future.
4. Retirement Plans
Continuing in the favor of a mortgage for the sake of building your equity in item #3 above, the ability to retire on your own terms and home ownership go hand in hand. A recent survey found that 64 percent of working Canadians either don't know or don't believe the Canada Pension Plan (CPP) will be there for them when they retire, so it's a good idea to depend on other means - with real estate equity topping the list. Take your future into your own hands today with a mortgage pre-approval, just to get started without full commitment.
5. You Know Where You Want to Live
This may seem like a pretty general point, but in fact, it's one of the most important ones. Where you live and your quality of life is directly connected. As a resident, there's a neighborhood in the Winnipeg area that you absolutely see yourself living in. It may be in a young and hip new urban oasis, a family friendly community peppered with culdesacs, or near the banks of Red River where you can begin and end your summer days with a paddle around the bend. If you have a clear picture of where you want to live in our great city, then it's time to make that dream the proverbial reality.
As a first-time homebuyer, you still have lots of questions, and you should. That's what I'm here for, and trust me, there isn't a single thing that you should be afraid to ask. Let's start with a casual conversation. Call me at 240.290.9950 today, or complete the form here and I will get back to you shortly.