There are many young people that relish the prospect of owning a home, but are reluctant to take the plunge all the same. For some, the reason for the tentativeness is related to their financial status; while for others, their reluctance is induced by uncertainty in the housing market. Well, what most young people need is just the direction or guide on the right way to go. Presented in this piece are some useful home buying tips for twenty-something’s in London, Ontario and elsewhere.
Watch Your Spending
If you are in your twenties and considering acquiring your own home in London, Ontario, it is essential you watch the way you spend your money. Having a credit card in your possession confers extra level of purchasing power on you and you may be tempted to spend as you like, perhaps, in preparation for your impending home. Before you realize what is happening, you may find yourself in a fix, as lenders could consider lending you funds a risky venture.
It is advisable that before you start making moves to buy a home you must be certain that you are indeed ready. What do I mean? Gone are the days when lenders require little or no down payments. Now, you need to be able to put at least 10 percent down as upfront payment for the process to take off. You also need a good credit score to qualify for a plan that would make your task easier.
In order to be really sure you are ready to own a home, give a thought to your monthly liabilities or debts. These liabilities include your student loan payment, car payment and credit card bills, among others. If your debt-to-income ratio is on the high side, say, 45 or 50 percent, you may want to shelf the idea of owning a home for the moment. This is because if you decide to go ahead, the home might end up in foreclosure when you are unable to meet up with your mortgage payments and other charges.
Consider Using the First-Time Home Buyers’ Tax Credit (HBTC)
This program was introduced by the Canadian government to make home buying easier for first timers, especially the young people. The HBTC offers first time buyers a $5,000 non-refundable tax credit for qualifying homes bought after January 27, 2009. Up to $750 is also provided in federal tax relief.
If you’d like to find out more about using the first-time home buyers’ tax credit, or have any related questions at all, please get in touch with us.