The pandemic has undeniably changed the way people buy houses. What was once safe and common sense to do – such as open houses and showings, is now something we need to do with extreme.
Buying A House When Single
Dated: March 15 2021
It seems like everyone has the same bucket list: get married, buy a house, adopt a pet, have kids, get a big promotion, travel and then retire. But who says you have to complete these things in order? You can definitely become a homeowner with just one income, and here is how:
Determine How Much You Are Able To Pay
The most important thing in the process of buying a house, whether you are single or not is setting a budget. This budget should account for all of your expenses – including debt repayment. Have a very clear view of where your income goes each month. A good way to figure this out is to try an online calculator to determine what your borrowing capacity is.
Just remember, that in addition to your monthly mortgage fees, you will need to set aside some savings for additional expenses such as notary fees, municipal and school taxes, renovations, maintenance and other similar costs. Always save more than you think you need!
Prepare Your Finances
There are many ways that you can establish your finances. One way is to improve your credit. If you go talk to a financial advisor about your credit, you will be able to ensure that your credit report doesn’t contain any errors that could negatively affect you. Having a positive credit history is important as your credit score affects your capability of obtaining a mortgage and a good interest rate.
You can also prepare your finances by working hard to repay your debts. The less debt you have, the less of a risk you appear to banks which will also improve your credit score and mortgage rates.
Save For Your Down Payment
You can save as little as 5% towards the price of your home. However, it is important to know that if you have less than 20% saved, you will be obligated to pay the insurance premium for the Canada Mortgage and Housing Corporation.
On the positive side, if you have an RRSP you can use up to $35,000.00 without being taxed towards your down payment! This is a great way to add to your down payment as you have up to 15 years to pay back the $35,000.00.
Research Your Dream Home
As a single person, your needs for a home will be different than a family. You will not require as much space, but you still might like the idea of a yard. Think about how long you want to live in the space, if you like the idea of renovating or if you are particular about which neighbourhood you want to live in.
Choose Your Mortgage
There are many things to consider when choosing your mortgage. The first thing to consider is whether you want a fixed or a variable rate. As a single person, we recommend you get a fixed rate. This is because the responsibility of making payments solely falls on you; should interest rates go up, your financial wiggle room isn’t as big as if it were with a dual-income family.
Buying a house as a single property can be very exciting and a great milestone to achieve in your bucket list! If you have any further questions please don’t hesitate to reach out.