Financial tips for first-time home buyers
If I was to offer one piece of advice for a first-time buyer it would be this: never spend as much on a house as the bank is willing to lend you. It’s tempting to take the money and buy the nicest place you can, but your home is likely to cost much more than you think it will. The roof will leak or the furnace will need to be replaced, or the renovations you plan will end up costing twice what you’ve budgeted. Plus, even if you have a steady job, you can’t guarantee your income won’t be disrupted by illness, unemployment, or another sudden change in circumstance such as the addition to the family of a new bundle of joy. For many Canadians, mortgages are the largest source of debt — and often a significant financial stress. But we have an advantage: although prices are going up in the West Island and Off-Island, as in the rest of Quebec, it is still possible to buy or rent an affordable home in a good neighbourhood. Perhaps that’s why a recent survey from the Canadian Payroll Association (CPA) found that while more than a third of Canadians said they felt overwhelmed by their debts, here in Quebec, only one in five felt their debt was too big to handle. CPA spokesperson Rachel De Grâce said the lower cost of daycare and housing gives Montrealers a financial advantage over cities like Vancouver and Toronto with a higher cost of living. “In Toronto if you are a Millennial or Gen-X working parent, you’re looking at $400-450 per week in daycare. That definitely eats up a lot of otherwise disposable income that could be put aside for savings or for your first home,” De Grâce said. According to numbers from the Canadian Real Estate Association, in Vancouver, the average price of a detached home is over $1.5 million. In Toronto it is just shy of a million. In Montreal? About $340,000. “Across the board, people are saying mortgages are the most difficult to pay down,” said De Grâce. “It makes sense. It’s a huge debt, but it’s what we and almost every other financial expert would say is not a ‘bad debt’ because at least you’re building equity. it’s not like credit card debt.” If you’re thinking about moving, start by getting your financial house in order. Know how much you really spend, then make the most of the Quebec advantage and buy a home you can really afford.