While renting can have its perks, there's nothing like the feeling of owning your own home. But how do you know when you're ready to make the move and buy your first home? Here are just a few signs that it's time to upgrade your living arrangements.
1. A Growing Family
Are you expecting? Is your sister-in-law using the couch in your home office as a bed until she gets back on her feet? Or maybe you and your partner have decided to get a pet, but you don't have a yard for the new puppy.
Whatever the reason for the growth, if your current house is starting to feel more cramped, it could be time to get a new place.
New residents can quickly fill up a house or apartment that isn't meant for so many people, and that's not including all the "stuff" that comes with them. By investing in a newer, bigger home, you can use the extra square footage for things like a nursery or guest room, while building equity for yourself, not your landlord.
2. You Have a Stable Source of Income
It's a common misconception that you have to be rich to buy a new home. Thanks to tax credits and mortgage assistance programs, you can afford much more than you think, even if you're on a mid-sized income.
When buying your first home you can take advantage of the First-Time Home Buyer's Tax Credit to claim a rebate back on some of your down payment.
Check out the video below for details on the First-Time Home Buyers Tax Credit:
If you have an RRSP, the Home Buyer's Plan allows you to borrow up to $25,000 from it to buy a home. You'll need to remember that this must be paid back within 15 years, or else you'll end up paying taxes on it.
3. It's Cheaper to Buy Than Rent
Believe it or not, there are circumstances where it's actually less expensive to buy a home than to rent! If you live in a big city, for example, rental prices might be sky-high in the downtown area whereas building a home in the suburbs is more affordable.
According to Rent Jungle, the average rent for an apartment in Edmonton for November 2018 was $1,270 (a 16.14% increase from last year). If you look at a townhouse with a price of $289,800 at a fixed rate of 3.42% and a 20% down payment, your mortgage payment would be $1,148.
Additionally, when you're renting you don't earn any equity in that home.
There are some valuable first time home buyer resources for financial aid out there. Remember to also consider buyer's and seller's markets and how they affect property values.
4. You Want Change You Can't Find in a Rental
This is a tell-tale sign that you're getting bored with your surroundings. It can also be a symptom of wanting more control over your life and your environment, especially if you're renting and can't make the design or decor changes you want because of your lease agreement.
If you're frustrated because you can't install the claw foot tub you've always wanted in the master bathroom, you'll find it very satisfying to buy your own home and make changes wherever you please.
5. You Want More Space for Needs and Interests
Are you really into yoga? Maybe you want the flexibility to work from home two days a week. A large basement would make a great fitness area, and a flex room can give you all the space you need to be productive.
When you make the switch from renting to owning a brand-new home, you will have more space and more rooms to cater to your personalized needs.
6. You've Settled Your Debts
Congratulations! Those credit cards are finally paid off. You should qualify for a much better mortgage rate now, Your credit score effects your mortgage application so by paying your debt off, you've increased that credit score number.
If you've been considering buying your first home but were waiting until you could get your finances under control, now is a great time to talk to a lender.
7. You Want to Build and Personalize Your Own Space
A professional home builder can build the home you've always wanted. From the number of bedrooms to the colour of paint on the walls, you can have control over everything that's built in your home. That freedom doesn't exist with a rental property, so consider starting from scratch and getting exactly what you want.
8. You're Interested in a Specific Neighbourhood
New neighbourhoods doesn't always have a lot of rental options, if any at all. The good news? When you find the community you love, you'll be able to take advantage of the many nearby amenities once you move into your new home!
9. You Want a Forever Home
Do you feel the itch? You know, the one where you want to settle down and quit apartment-hopping like you did all throughout college? It's quite common for those who are moving out of their crazy 20s and into their more stable 30s, but it can strike at any age. If you've been longing for a permanent place to call your own, it might be time to switch from renting and buy your first home.
At the end of the day, you'll have to decide for yourself if you're ready to make the commitment to buying/building your first home. No one else can make the decision for you, so you have to trust your instincts and what the signs are telling you. Happy house hunting!
*Originally posted June 16, 2017, updated January 4, 2019.