What's the Right Age to Buy a Waterloo Region Home?
There is no “right” age to buy a Waterloo Region home, but it is smart to take an honest look at your current situation while deciding whether or not to buy. Many people's largest investment is their home, and their status as a homeowner can benefit or hamper them financially. Your living situation, perhaps most importantly, also has a major impact on your quality of life.
When Should You Buy a Waterloo Region Home?
Buying a property can be beneficial at any age, young or old, as long as the circumstances are favorable. At the very least, you'll be ready to buy when you can confidently answer the following in the affirmative:
Can you afford the monthly mortgage payments and other recurrent costs of owning a Waterloo Region home comfortably?
Is it possible to get a good mortgage loan? (or better yet, pay cash)
Do you plan to stay in the house long enough to recoup your buying and selling costs, as well as recover from any price drops (markets do change, and sometimes faster than you might anticipate)
Can you afford to take on the risks, such as unexpected maintenance costs or your house losing value in a down market?
Are you prepared to take on the responsibilities of homeownership and maintenance?
None of this is meant to imply that if you don't buy a house by a particular age, you're being reckless or missing out. Purchasing a Waterloo Region home can be a costly, time-consuming, and difficult process. Renting has its own set of issues, but it's a lot easier to pack your belongings and go when your only commitment is a six-month lease.
Reasons for Buying Your Waterloo Region Home Younger
If you want to buy when you’re younger (and you have the right resources to do so), there could be lots of potential benefits of getting an early start over waiting.
Assuming that things go well, owning a home is a route to increasing your net worth. The “forced savings” of your monthly payments helps you build equity in the property, which you can use for another property or other needs later in life. Instead of giving 100% of your monthly housing payment to a landlord, you “save” a portion of each payment.
There is no guarantee that your home will gain value, but that is what happens in many cases—over the long term. Especially in strong markets with plenty of potential, price appreciation might contribute to your overall wealth accumulation plan. But it’s always safest to buy a home as a “home” that you want to live in—not as an investment.
A Place of Your Own
When you own a home, you’re in charge. You can customize the appearance or the layout to suit your style, make improvements that add value, and feel more like you really belong in the community you live in. You don’t need permission from a landlord, and you don’t need to undo all the great things you did in order to get a security deposit back. That said, local rules and HOA restrictions could affect what you can do, so research any potential limits before buying.
Reasons For Waiting to Buy a Waterloo Region Home
As you get older, you develop a clearer picture of your ideal home. The future is always uncertain, but you gain more clarity on several crucial factors as you age:
Your work location, or your ability to work remotely
Your income available for housing payments
The size of your family, if any
What you really need, and what you’re willing to live without
Many (but not all) people earn more money as they get older. As you enter your higher-earning years, it’s easier to buy exactly what you want—without making major sacrifices. Instead of being “house poor” and dealing with your property in your 20s and 30s, you can spend those years saving for a big down payment, traveling, or doing anything else you want. What’s more, you can build credit over those years, making it likely that you'll qualify for the best loan possible.
Other Factors to Consider When Timing a First Home Purchase
Available Down Payment
A down payment can help you minimize monthly payments and interest costs. You can also avoid paying extra private mortgage insurance (PMI) and reduce your risk by putting down at least 20%. But some loans allow you to buy with a small down payment, which makes it easier to buy at a young age. Evaluate the tradeoffs before you jump at the chance to buy with a smaller down payment.
Will your income or location change over time? For example, some medical professionals start out with significant debt burdens, but they earn high incomes later in life. If a career change is imminent, figure out how that could impact the appeal of buying. Other careers range from relatively stable (e.g., a job with a university) to unpredictable (e.g., a job with a startup).
When you own a home, you’re responsible for everything. If there’s a lawn, you get to mow it, rip it out, or pay somebody to do so. If there’s a leak, you need to address it before it causes severe damage. Consider your willingness to take on those tasks. Will you do everything yourself (with the help of YouTube) or pay somebody? If you plan to hire out the work, do you have the funds, and is it easy to find reliable help in your area?
The Property Market in Your Preferred Area
Local conditions may steer you toward buying or waiting. For example, if your monthly rent is extremely expensive, but purchase prices are quite reasonable, you may choose to buy sooner to keep your housing costs affordable.
One of the best ways to determine if buying a home right now is a good move for you is to speak with an expert. Let Team Pinto use our huge experience and expertise to help you. Contact the award-winning Team Pinto here, or book a free Zoom consultation to discuss your unique Waterloo Region real estate needs here.