Le bon moment pour acheter sa maisonApril 4, 2017

The Right Time to Buy a Home

In the long term, buying a home is much more interesting than renting. However, you must do so at the right moment. How will you know that the time is right? That would depend on two factors: the current state of the real estate market and the state of your finances.

Current state of the market

The first factor to consider is always the state of the market. In the ideal situation, you want to buy when prices and interest rates are as low as possible. However, the moment you decide to buy may not coincide with such a state of the market.

To test the waters, ask about the fluctuation of real estate prices in the area you are interested in for the past 12 months. This will allow you to see the time of the year when the values are more advantageous for you.

Being in a position to buy

In 2015, the average selling price for a house (including single family homes, different “plexes,” and condominiums) in the Greater Montreal area was $336,050 and in Quebec City - $265,700.
Your negotiating power when applying for a mortgage will primarily depend on your current debts and income. It is always preferable to obtain pre-authorization from your banking institution. This will tell you your maximum borrowing capacity and allow you to create a budget that would take monthly payments into account – you would thus be able to see if you would be comfortable with making such payments or not.

In addition, your financial situation may influence the type of mortgage you get – a conventional one (20% or more down payment) or CMHC insured (less than 20% down payment).

Keep an eye on interest rates

Interest rates are adjusted based on the key rate set by the Bank of Canada. In recent years, they have remained very low. However, according to Statistics Canada figures, Canadians have become more indebted than ever before. To put it briefly, if the pressure on the real estate market is low, you should always be vigilant for market fluctuations.

Stay alert

Do you have to move right away? Do you have time to wait until you buy the property? Are you starting a new job? Are you ready to take a risk when the interest rates are low?

Have patience. Purchasing a home can result in a series of problems and direct or indirect expenses (which you may not have budgeted for) that will need to be considered.

Our list here, of course, cannot be exhaustive, but a reserve fund of several thousand dollars will make a world of difference. Keep in mind that you will have to cover:

  • Realtor fees,
  • The welcome tax,
  • Moving expenses,
  • Minor retrofits or renovations (painting, cleaning, parts replacement, etc.).
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