Our basic, Yes/No quiz will tell you if you’re ready for homeownership this year.

Are you familiar with the real estate market in your preferred neighbourhood?

Homeownership-ready answer: YES.

Start perusing the real estate pages and Realtor.ca well in advance of your house-hunt, so you know what properties sell for. There’s nothing worse than meeting an agent, only to discover the average price of homes in your preferred community is double what you were hoping.

 

Do you know how much you can afford to spend on your first home?

Homeownership-ready answer: YES.

You want to start your home search pre-approved for a mortgage. Find out ahead of time how much that mortgage will most likely be by using Genworth Canada’s How Much Can I Afford calculator which factors your income, debt and other expenses into mortgage and monthly payment amounts.

 

Have you saved enough for at least a 5% down payment towards your first home?

Homeownership-ready answer: YES

The good news is, you don’t need a sizable down payment to buy your first home. Conventional mortgages require a down payment of 20% of the purchase price, but with a Genworth mortgage and mortgage insurance, you can buy with as little as 5% down.

 

Do you have a regular income source, whether you are salaried or self-employed?

Homeownership-ready answer: YES

Conventional lenders favour borrowers with salaried income, but Genworth recognizes many Canadians are self-employed. Our Business For Self mortgage is geared at self-employed borrowers. If you’ve got a two-year history of managing your credit and finances responsibly, you can qualify without traditional income verification.

 

Have you got a handle on your consumer debt?

Homeownership-ready answer: YES.

If you’re carrying a high debt load, it could hinder your ability to meet your financial obligations as a homeowner. Your monthly debt repayments (housing, car, credit cards, lines of credit etc.) should not exceed 40% of your household’s gross monthly income. If you’re carrying more than that, be aggressive about paying it down so you’re set up for success when you do buy your first home.

 

Do you have a credit history?

Homeownership-ready answer: YES.

Lenders look at your credit history to determine if you’re a reliable borrower Refraining from credit cards altogether is counter-productive. If you’re hoping to buy your first home this year, establish good credit history by acquiring a standard credit card. Use it for small purchases and pay off the full balance each month.

 

Do you have a healthy credit score?

Homeownership-ready answer: YES.

Poor credit history makes it harder to get mortgage approval. Always meet your monthly minimum payments on time, but don’t stop there. Be aggressive about clearing your credit card debt, or at least bringing each credit card balance to under 35% of its credit limit. If you’re recovering from bankruptcy, apply for a secured card to help re-establish a pattern of responsible borrowing.

 

SCORING:

Tally up your points:

If you chose 4 or more yes, you’re probably ready to start your home search! Check out the Homeownership section of Homeownership.ca for info on beginning your homebuying journey in 2015.

If you scored under 4 points, you may need a bit more time to prepare yourself for homeownership. Refer to the Financial Planning section of Homeownership.ca for tips on improving your financial fitness in 2015.

 

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