Trials and Tribulations in Finding a Home in Today's Market
There’s no doubt about it, buying a home is one of the most significant and important transitions you will make. With this being said, it’s imperative that you find the right home to serve the needs of both you and your family. In today’s market, the hard truth is that buying a home isn’t a simple process. Especially if you have high standards for your home or unique needs.
But, why is it that it’s so difficult to buy a home right now? We explore the trials and tribulations of finding a home in today’s market in this article!
Reasons Why It’s So Hard to Buy a Home Right Now
When it comes to the real estate market, there is no linear explanation for why things are the way that they are. The reason that you are having trouble finding or buying a home may be completely different than another person or family.
Certain factors can come into play, such as your location, the time of year, your real estate team, your financial situation, and the state of the market as a whole.
One of the most impactful factors as to why you may be having trouble is supply and demand. If there are fewer homes available on the market than there are buyers, it can most definitely contribute to the difficulty of finding a home.
Other factors can include:
Increase in mortgage rates
More stringent requirement for mortgage approval
Economic uncertainty in general
While these factors can be downright frustrating to combat, especially as a first-time homebuyer, there are things that you can do. We suggest speaking and working with industry experts. Booking an appointment with a mortgage broker is a great first step, along with finding the best Realtor® for you.
With the right team of experts by your side, chances are you will be able to make an informed decision that is best for you.
The Steps You Can Take
Is it time to buy a house? Or perhaps, the idea of buying a house is more real than ever before? No matter your reason, now is the perfect time to start making lifestyle changes and more informed decisions that can impact your ability to own a house one day.
To help you get started and make a splash in your local market, here are some of the best steps to take!
Pay Down Your Debt
One of the top reasons why a person or couple will be declined by a lender?
Debt.
If your debt to income ratio is too high, you may be more likely to be declined when trying to get approved for a mortgage.
While this can be an uncomfortable experience, it may be the sign you need to focus on your debt repayment. Especially because this step can take months, if not years, to fully complete. Not to mention how much of an impact that debt can also have on your credit score - which can also impact your ability to get approved for a mortgage.
So, what is the best way to pay down your debt? While there is no clear yes or no answer, we suggest gaining inspiration from “The Snowball Method”.
The method is simple:
List your debt from smallest to largest sums owing
Set your minimum payment for each source of debt to be paid each month
Place any additional money that you have to go toward debt repayment to the source with the lowest amount owing
Once the smallest amount of debt has been paid, reallocate that amount (the minimum payment and additional money) to the next lowest source of debt on your list.
Repeat this process each time a source of debt has been paid off.
Just like a snowball, the amount of money that you can put toward a source of debt each month will grow, allowing you to make larger and larger payments each month.
The hard part? Not adding to your debt in the meantime. While it may be tempting to pay for a night out, car repair or piece of furniture with your now paid off credit card, this can put you right back where you started.
Save, Save, Save!
No matter how little or large the amount may be, saving money is always a great idea. Especially when you are working toward a down payment for the purchase of a house!
If you are able to save a significant amount of money each month towards the purchase of a home, we suggest making the most of the accounts and financial advantages that are available to many Canadians, such as an RRSP or TFSA savings account.
Keep an Eye on the Market
Even if you won’t be in a position to purchase a home for another year or two, keeping an eye on the market can provide you with a great advantage. You can learn more about the most sought-after neighbourhoods, up-and-coming communities and areas that don’t meet the needs of your family.
This is also a great opportunity to perform your own market research, watching the average prices of homes in certain communities, mortgage rates and even supply and demand in your preferred area. A good Realtor® will be happy to set you up with an automatic email of new listings in your area, even if you are still a ways out from being ready to purchase.
Knowledge is power, especially in real estate!
Increase Your Income
Increasing your income is an excellent way to increase your odds of entering the real estate market. The more income that you have, the more savings you are likely to have and debt you are able to repay.
This can also put you in a better position to buy a house, as you will be more likely to afford all that comes with home ownership. Not to mention the various costs that are associated with the transaction of purchasing a home!
We understand, increasing your income is sometimes easier said than done. You may want to consider expanding your education, taking more training courses, speaking with your employer about the ability to grow within your company, or even taking on a side hustle!
Reduce Your Spending
Simple, yet effective - reducing your spending is a great lifestyle change to make. Not only can it provide you with more disposable income that can be put towards your savings, but it can also reduce your risk of increasing debt.
What are some simple ways to reduce your spending? We suggest shopping generic name brand food at the grocery store, using coupons, trading goods with others, shopping second hand, or collecting points in order to redeem at a later date!
With the right approach and dedication, you’ll have your spending reduced in no time!
