A Guide to Home Buying for Millennials
Published 10th of April, 2022
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Millennials are becoming a significant component of the real estate market as they gain interest in becoming homeowners. An RBC Economic Research study found that the homeownership rate among Canadian millennials was approximately 43 percent in 2016.
Many millennials approach homebuying differently than older generations and focus heavily on digital processes to fulfill their desires. If you’re a part of this demographic and are jumping into the home buying market, there are a few things that can better prepare you for this life-changing event.
Understand the Costs
Many costs are associated with purchasing a home, such as mortgage rates, lawyer fees, home inspection charges, and title insurance costs. Although some are one-time expenses, others are recurring, such as mortgage costs. To reduce your financial burden in the long term, look for the best mortgage rates Canada lenders offer.
Understanding the fluctuations in mortgage rates and shopping around for a mortgage allows you to select a rate that works best for you. The mortgage rate that a lender charges you depends on numerous factors, but the primary is the government bond market. Speak to different mortgage specialists to determine which rate is feasible for your financial status.
Pay Off Student Loans
According to the Canadian National Graduates survey results, one in two postsecondary graduates had student debt at graduation between 2000 and 2015. The type or number of loans depends on the degree type and the student’s financial background.
Buying a home with a mortgage loan is a significant debt, so it is in your best interest to pay off any existing student loans. Having too many outstanding debts also reduces your chances of getting a favorable mortgage rate as lenders may look at you as a risk. Even if they offer you a loan, you might be charged a high-interest rate.
Consult a Reputable Agent
A real estate agent can shape a first-time homebuyer’s experience. Since the purchase experience can be overwhelming and stressful for millennials dipping their toes in the housing market, a good agent can make the process seamless. Working with a credible agent gives you peace of mind knowing that you’re in good hands.
Do your research to find a good agent and consult family or friends for referral if necessary. You may need to speak to a few agents before finding one that makes you comfortable.
Find an Affordable Home
The rising home values in Canada’s current housing climate may discourage many future homeowners or lead to wrong decisions. You might be tempted to stretch your dollars and purchase a home that’s out of your budget, or you may feel discouraged to enter the market.
The best way to tackle this hurdle is by taking your time to see as many homes as possible. Discuss your expectations with your agent and leverage tools like virtual house viewing and online mortgage calculators to find a good fit. When you’ve shortlisted your options, visit your home options in person and keep looking until you find one that makes you happy.
Don’t Rush the Process
Buying a home is a major milestone. Make sure to enjoy the process and refrain from rushing into it to escalate the task. The more time you take to educate yourself about the steps, the happier you will be when you move into your new home!