Buying a Home Is a Personal Decision
Even though you may qualify for a certain mortgage amount, consider how making those monthly payments will impact your lifestyle and other things that are important to you.
Be honest when deciding what you can afford. Carefully consider your current lifestyle. How much do you spend on going out to dinner, movies, etc.? Can you make changes to your current spending habits to afford your new home? Will you be satisfied with the changes you’ve made?
It’s also important to think ahead. Where will you be in a few years? If you’ve never owned a home before, think about the additional costs associated with home ownership. Utilities, water, internet, new furniture – each of these will impact your cash flow.
Changes in family structure, like the birth of a child, will affect your ability to meet your monthly financial obligations. Monthly income may be reduced due to maternity leave and expenses will increase with the needs of a new baby.
Consider your employment situation – are you expecting a salary increase? Is your spouse/partner returning to work? Perhaps stretching yourself now is the right option to achieve the added flexibility of owning your dream home.
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It’s All About Balance
Is a starter home right for you? Do you want to purchase a home with the understanding that in a few years as your family grows and changes you may need to upgrade? Or do you want to go for your dream home now – and potentially never have to move again?
You’ll be living with this decision for many years to come, so be sure to consider everything carefully. Remember, you want to be able to sleep at night knowing you made the right decision.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.