Today's higher prices, market volatility and tighter lending conditions pose challenges for first-time home uyers that did not exist 10 years ago. The barriers to get into the housing market, especially in urban centres, can seem insurmountable, but with some financial discipline in place, young Canadians may be able to realize their dreams of buying a home.
Farhaneh Haque, director of mortgage advice at TD Canada Trust, says the key to breaking into the housing market is to follow three simple strategies: pay down debt, increase savings, and set realistic goals.
"Whether it's credit card balances or student loans, it's important to get your debts under control before you take on a mortgage," says Haque. "Consider consolidating higher interest credit balances into a loan with a lower rate. It may also help to set up a regular pre-authorized transfer of a portion of your paycheque onto your loan, so you can chip away at your debt without having to think about it."
With high house prices, saving for a down payment may seem daunting for first-time buyers, but Haque says a little creativity can help overcome this.
"Look at your budget for opportunities to cut expenses and give your savings a boost. Remember, even a small increase can make a big difference in the long run," she says.
"Finally, do your research so you will have realistic expectations. Meet with a mortgage specialist who can help review your finances so that you are aware of what you can afford when you get into the market," says Haque. "Carefully consider all your available mortgage options before choosing a mortgage that works for you."
