Tag Archive for: buying tips

financial-health-to-buy-a-home-for-sale-in-comox

The Importance of Financial Health When Buying a Comox Home

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Financial Health is Important to Realizing Your Real Estate Dreams in Comox

Making sure your finances are in order and improving your financial position is essential for long-term stability and peace of mind. It doesn’t just happen, but is something you have to work on to achieve. This is especially true when you decide it’s time to purchase a home.

Step One in the Importance of Financial Health When Buying a Comox Home

The first step is to create a budget and stick to it. Begin by tracking your income and all expenses for at least a month to understand where your money is going.

  • Categorize your spending into essentials (housing, utilities, groceries) and non-essentials (entertainment, subscriptions). Use this information to set realistic spending limits and prioritize needs over wants.
  • Apps and tools can also make budgeting easier and more effective.

Step Two

Next, you should build an emergency fund. Life is unpredictable; having a financial cushion can prevent setbacks from turning into crises.

  • Aim to save 3–6 months’ worth of living expenses. Don’t be discouraged if that feels daunting.
  • Start small, even $10–$20 from each paycheck. That may feel more attainable. If you try to do too much, you probably won’t do anything. Automate your savings to ensure consistency. Over time, these small contributions will grow into a safety net.

Step Three in the Importance of Financial Health When Buying a Comox Home

Your next plan should be to pay down your debt. Debt can be a significant barrier to financial health, so it’s crucial to pay it down in a thoughtful way. High-interest debt, like credit cards and payday loans, should be your top priority. Those types of debts compound quickly and can drain your resources.

  • Use strategies such as the snowball method, where you pay off the smallest debts first for psychological wins. The avalanche method, focusing on the highest-interest debts to save money overall, is another way to do this. Whichever method you choose, be sure to make at least the minimum payments on all debts to avoid penalties.

Step Four

Now it’s time to embrace another vital component of your financial health—invest in your future.

  • Begin contributing to retirement accounts, such as an RRSP if your employer offers one, especially if there’s a company match. It’s essentially free money.
  • If an RRSP is not an option, consider a high-interest savings account.
  • Beyond retirement, explore low-risk investments, which can grow your wealth steadily over time. Even small, consistent contributions can lead to significant returns thanks to compound interest.

Final Steps in the Importance of Financial Health When Buying a Comox Home

Finally, it is essential to regularly review and adjust your financial plan. Financial needs and goals evolve. Take time annually or after major life events, like a new job, marriage, or a baby, to reassess.

  • Review your budget, savings, investments, and debt repayment progress. Adjust your plan as needed to stay on track and adapt to changes.
  • Regular check-ins help you stay proactive and maintain momentum toward your goals.

Financial health is a journey, not a destination. Consistency, patience, and smart planning will lead you to long-term stability and financial freedom. Remember, even small steps make a big difference over time!

Once you have a handle on your finances and are confident you are ready to make that big move, call Janice to continue the journey.

mortgage changes in bc real estate

Navigating through mortgage changes in BC real estate

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Recent changes in the housing market present exciting opportunities for homebuyers. As your Comox REALTOR®, I can guide you through these updates. A mortgage broker can help you build effective plans to achieve homeownership goals. In this way, you can establish what you are able to afford. This is one way to streamline your search for a property.

Knowing these new rules and guidelines will help with strategy and future goals of climbing the “real estate ladder.”

Expanded amortizations for first-time homebuyers

Starting December 15, first-time homebuyers will have access to 30-year amortizations. This change can be of benefit in two significant ways:

  1. Lower income requirement. By extending the amortization period, the income required to qualify for a home purchase decreases. This means more buyers can meet the necessary criteria.
  2. Reduced monthly payments. A decrease in monthly payments will make homeownership more financially manageable. For instance, on a $600,000 purchase, the monthly payment could drop by approximately $250, providing greater flexibility in budgeting.

Increased insured mortgage cap to $1.5 million

High income, but difficulty saving for a down payment? An increase in the insured mortgage cap to $1.5 million can accelerate your path to homeownership. Previously, purchasing a $1.4 million home required a down payment of $280,000. Now, as of December, clients can potentially purchase the same property with a down payment of about $115,000. This will save a whopping $165,000.00 in upfront requirements.

This change is also advantageous for “right-sizers” who want to downsize. It allows the buyer to allocate more funds from the sale of their larger home toward retirement. Then you can put less down on a new, smaller property. However, you should keep in mind that closing costs, typically between 2 and 4 percent of the purchase price, need to be accounted for in each scenario.

For a $600,000 purchase price, anticipate that clients will need an annual income of approximately $150,000 to meet today’s stress-test requirements.

Switching lenders at renewal: A business opportunity awaits from mortgage changes in BC real estate

While you may not initially think about how switching lenders can benefit you, it’s essential to understand that mortgages encompass more than just interest rates. The Canadian Mortgage Charter now allows insured mortgage holders to switch lenders at renewal without undergoing a stress test. This change opens up opportunities for borrowers to shop around for better rates and terms, potentially saving thousands of dollars.

Tax-efficient savings strategies around mortgage changes in BC real estate

As well, two important tax-efficient savings methods have emerged that can empower you on your journey to homeownership:

  1. RRSP withdrawal limit increase. The amount that can be withdrawn from an RRSP has increased from $35,000 to $60,000 per borrower. This change provides additional funds for you to put toward your down payment.
  2. First-time home saver account. Introduced in 2023, this account allows you to save $8,000 per year in contribution room, which reduces your taxable income.

Unlike RRSP withdrawals, funds from this account do not need to be repaid and any gains earned within it are tax-free. This account, however, has a sunset clause in 2028, making it vital for clients to act quickly to maximize its benefits.

These recent changes create valuable opportunities for purchasers. Make informed decisions on your path to homeownership. Speak to your mortgage broker about the implications and opportunities surrounding expanded amortizations, increased mortgage caps, flexible lender options, and tax-efficient savings strategies.

Call me if you would like to connect with a competent, knowledgeable, and experienced mortgage broker.