The expenses don’t end once the deal is done.
Purchasing a home is one of the biggest financial investments that most Canadians will ever make. Homeownership is a major financial commitment, but it’s also a deeply personal and emotional acquisition. A home is a source of pride, a conversation-starter, and a reflection of the homeowner’s personality. In other words, it’s not a decision that should be taken lightly, and requires some upfront research.
In addition to the amount of your down payment, here are some important points to consider:
Factor in ongoing costs.
The expenses don’t end once the deal is done. Buyers should do some research to get an idea of how much their home will cost over the years by determining what kind of upkeep is required throughout all seasons. Having a good idea of what these costs are and when they may come up means fewer last-minute expenses. Experts suggest having money set aside: an emergency fund that would cover three to six months’ of expenses is considered standard, although this number can vary given your personal circumstances.
Consider insurance to protect your investment.
There are two main types of mortgage insurance available: creditor mortgage life insurance which provides insurance protection on the mortgage in case of death; and, mortgage default insurance, which provides the lender with flexibility to give you the same competitive interest rates available to homebuyers who can provide larger down payments. It does this by protecting the lender should you be unable to make the mortgage payments.
Know that there’s help when you need it.
Genworth Financial is the largest private insurer in Canada, and has helped over one million Canadians realize their dreams of homeownership since 1995. If you have a Genworth-insured mortgage, you can take advantage of the Homeownership Assistance Program. Developed to help families stay in their homes when faced with temporary financial difficulties that put the mortgage at risk, the program enables you to work with your lender and Genworth to explore alternate payment arrangements to help you keep your home.
A home builds equity:
Once you own a home, as its value increases so too will your equity. Equity is the market value of your home minus the mortgage, so it also increases as you pay down your mortgage. Home equity can be used as collateral against a loan. It is a powerful motivator for owning a home.