Being financially able to afford a home in Canada can seem like a faraway reach for many people, but not all hope is lost. More than ever, multi-family properties such as townhouses and condos are offering more amenities and beautiful properties for less, well, less than the crazy GTA prices. You just need to take the time to consider all of your options.
1. Expand Your Search
According to Nasir Manji, a Real Estate Agent with 32+ years of industry experience, associated with Realty Executives Plus Ltd. Brokerage, properties that carry a higher price tag starting at say, $500,000 is due to the high demand in certain locations which has been highly desirable areas for a long time and when demand is as high as we have seen in the most recent years (and low supply), many buyers will get pushed out of the marketplace because they simply cannot compete. These buyers have to be open to looking beyond the typical demand areas. We have already started to see this move away from the city due to the changes brought on by COVID-19. Employers are accommodating their employees with the work from home option. Expanding your search to include one or more of the outlying suburban areas can often provide more affordable options and can also give you a wider number of properties to choose from within your price point, says Nasir.
2. Talk to a mortgage agent
Find the right mortgage agent to facilitate your mortgage. This should not be only on the basis of an agent who says they can give you the best rate, it should also be an agent who can offer great service. Purchasing a property (especially when it is your first one) is not only your home, but also a huge investment. The process can be stressful and overwhelming for many buyers; you want to know fully what is involved to therefore be comfortable in making one of the biggest financial decisions. You want to ensure you have a mortgage agent who will guide you, have patience to answer all your questions, educate you along the way and be efficient throughout the process. Side note: efficiency does not mean replying to your clients within 2-3 days. Talking with a mortgage agent and going through a pre-qualification process can help highlight some areas where you may need to improve to help make you accessible to more lenders. This can include things such as: how to increase your credit score; decreasing your overall debt or consolidating your current debts.
3. Consider using a co-signer(s)
This involves adding the support of another person's income to ultimately enhance your application. A co-signer does not mean they will be on title of the property. If you do proceed with a co-signer for your mortgage, you should have an exit strategy planned ahead of time, this will be to remove them at the end of the mortgage term or if you choose to refinance before the term ends. Talk to a mortgage agent on the pros and cons of a co-signer.
4. Consider a rent-to-own (RTO) option
This can be an attractive option for those who can afford to purchase a home, but might not qualify for a mortgage at this time for any one of multiple reasons. The goal is to get the buyer(s)/tenants into the market place now and for them to qualify for a mortgage on their own at the end of the RTO term. You choose your property, live in the property for the RTO term and save money towards a higher down payment. Tenants are required to put a deposit of 5% of the purchase price to enter the program which is part of their down payment at the end of the RTO term when they qualify on their own for the mortgage. For all details on the RTO option, contact me.
5. Save, save, and save some more.
We know this is common sense but speaking with a financial advisor can help show you ways in which you can save and make your money work for you.