Expected expenses for first-time homebuyers
May 26, 2018
A new survey by TD reveals that more than half (56 per cent) of Canadian first-time homebuyers are afraid they’ll forget to take a crucial step as they gain their foothold on the property ladder. Thankfully there are ways to financially prepare and reduce stress for first-time homebuyers.
First-time homebuyers are stressed
Of those polled, 24 per cent say that the homebuying process is stressing them out, while 21 per cent admit they are simply overwhelmed. The survey findings also reveal that 71 per cent of first-time buyers are worrying about being hit with unanticipated costs during the homebuying process. At the same time, only 39 per cent are taking steps to reduce their debt and less than 28 per cent are working to improve their credit score.
“First-time buyers often enter the process with lots of unanswered questions,” says Marc Kulak, vice-president, TD Bank Group. “By anticipating expenses and adopting sound financial behaviours, you are setting yourself up for success.”
For first-time homebuyers looking to ease anxiety and stress during their homebuying journey, TD offers the following tips and advice:
Manage any existing debt
Before applying for a mortgage, learn how much home you may be able to afford after monthly expenses, debt payments and savings are accounted for.
Consider all homebuying costs
Less than half of surveyed first-time buyers had planned for appraisal fees (49 per cent), mortgage default insurance (47 per cent) or closing adjustments (41 per cent). Be aware of all the possible costs you could face so you don’t get hit with an unexpected expense.
Make your mortgage work for you
The TD survey revealed that 52 per cent of first-time homebuyers are uncertain which type of mortgage would be the best fit for their needs and lifestyle. Meeting with a financial advisor can help determine the best mortgage type for your personal financial situation.
Don’t put your finances under pressure
Don’t make the mistake of assuming your mortgage payments will be the only home-related expenses you’ll face. From property taxes to maintenance costs, there are lots of responsibilities and expenses that come with owning a home.
Protect your home
Most first-time homebuyers (70 per cent) are prepared for the costs of home insurance. Having the right insurance can help you feel at ease with your specific circumstances and help ensure there are no surprises down the road if crisis or catastrophe hits.
TD commissioned Environics Research Group to conduct an online survey among a total of 1,001 adults from Feb. 5 to 14, 2018. All respondents had to be 18 to 69 years of age, be a first-time homebuyer and reside in Canada.
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