2. Should I Buy A House in 2013?
• Some prospective homeowners don’t seem to pay any
mind to the market conditions when they feel ready to
buy a house. They just lunge forward with their eyes on
the prize and let the chips fall where they may.
However, there are those who prefer to exercise
patience and wait until they can derive the most benefit
from of the situation.
3. • If you’ve been wondering if 2013 should be the year for
you to dive in and buy a house, keep reading for some
useful tips and information.
4. The Bank of Canada
• Most people who are considering buying a house won’t even
consider the Bank of Canada, but their yearly forecast does help to
set the real estate market. For 2013, it was announced that the key
policy interest rate will remain at one percent. The forecast for
economic growth is for the Canadian economy to grow by about two
percent in 2103. In all likelihood, a stable housing market will mean
no interest rate increases throughout the year.
5. The Real Estate Market
• Some prospective home buyers will
consult the CMHC real estate market
forecast before deciding if 2013 is the
year to buy a new home. The CMHC
pricing forecast for 2013 says the
average MLS price will be between
$358,000 and $395,800 across the
country. Of course, this will vary
depending on where you live and what
you’re looking for, but it can act as a
guideline or gauge. You’ll also need
local numbers and averages to know
what the environment will be like in
your specific part of the country.
6. Running the Numbers
• Running the actual numbers that
pertain to your situation is one of
the best ways to know if 2013 is
your year or not. Even if the
interest rates are favorable, home
prices seem modest and there is a
decent supply, if you can’t afford it
then it probably isn’t going to
work.
7. Running the Numbers
• When you work out the numbers, you’ll have to consider
your household income and expenses, current credit
debt, property tax and the mortgage payments. There’s
also the matter of the down payment.
8. The Down Payment
• There have been times when a
down payment wasn’t required to
purchase a home, and you may still
be able to find promotions or deals
where you can get yourself a house
with zero down. However, most
experts will advise having a down
payment of up to 20 percent to
make the deal happen. Five
percent is often the required amount
that you’ll need to make the deal
happen. That would mean a down
payment of $15,000 for a $300,000
home.
9. The Down Payment
• Ideally, that down payment will
come from money that you’ve
saved and won’t have to pay back,
but that isn’t always the case.
Many home buyers turn to other
forms of credit to secure the down
payment, which may or may not be
a big deal depending on their credit
situation to begin with. There are
rules about borrowing your down
payment from credit, and your
lender may have the ultimate say
on whether this is an option.
10. The Down Payment
• In some provinces, cash back
down payments are still in play.
Basically, the lender will give you
five percent cash and you can use
that as your down payment. Not
many places still do this, and there
is talk of it being taken away
completely, but for those that can
use it, it may be an option.
11. The Down Payment
• There are also options like having the down payment gifted to you,
borrowing from your own retirement savings plan or exploring
different government programs. Whatever the end choice, how you
make the down payment and how much you have to pay will
certainly be a factor in whether you buy a house in 2013.
12. Are You Pre-Approved?
• If you really want to know if you should buy a house in 2013, you
should go get pre-approved for a mortgage first. Pre-approval
points you in the right direction and lets you know where you should
be looking. You’ll know how much you can spend, how much you
need to spend as a down payment and it just saves a lot of time
later on. It is extremely frustrating to make the decision to buy and
go through the motions only to discover there is something holding
you back from getting a mortgage. Once you make the first move,
you want to be sure that you can see it through to the end.
13. Further Reading…
• Josh Reso is Orangeville Ontario’s real
estate leader. Visit
http://www.joshreso.com/ today to view
available listings.