4 essential steps for homeowners in 2024

A new year is almost upon us, and many Canadians likely want to add homeownership to their goals for the new year. However, 2024 poses some unique challenges compared to previous years with record high levels of inflation and interest rates. Despite some of these hurdles, the good news is that homeownership is a goal that’s still achievable. There are simply some additional considerations that need to be top of mind to ensure you go into this prepared.

1. Start with a financial health check

In today’s market where inflation and interest rates are high, our expenses on daily essentials such as groceries and fuel have gone up significantly. As a result, this has left many Canadians relying on their credit cards or tapping into savings to get by. If you want to purchase a home in 2024, your first step is a financial health check. This involves a thorough review of your savings, outstanding debts, and credit cards to determine your financial readiness. This will give you insight into whether you have enough money for a down payment and if your income can comfortably cover your monthly financial expenses.

To take things one step further, it’s worthwhile to get a credit check and understand where your credit score stands as this also plays a role in your mortgage application. Lenders increasingly focus on financial stability, so ensuring that your finances are in tip-top shape will make this process that much easier.

2. Get pre-approved for a mortgage

Once you confirm that your finances are in good standing, getting pre-approved for a mortgage is a wise next step. Pre-approval provides insight into what banks, lenders or credit unions are willing to lend and how much you can borrow, helping you set a defined budget for your home search. This ensures you’re shopping in neighbourhoods you can afford, saving you plenty of time and heartache over those homes outside of your price range. Pre-approval also removes the stress of having to finance your home at the last minute and minimizes the risk of the deal falling through altogether – making things a lot less stressful.

3. Shop around for a mortgage with rates in mind

When it comes to getting a mortgage, many people’s default choice is to go directly to their home bank. However, this isn’t always the best approach, as there are numerous other lenders, including monoline lenders and credit unions, that offer more competitive and flexible mortgage products with better rates and features. Our team at Homewise prides itself on exploring the marketplace for a variety of mortgage options, spanning Prime A, B and private lenders, and presenting those options to clients so they can make an informed decision.

With interest rates at their peak, choosing the right mortgage type is a crucial decision. It’s important to weigh the pros and cons of fixed- versus variable-rate mortgages. A fixed-rate might seem more appealing because there is predictability in your payments, but variable rates could offer savings should interest rates go down. If you’re unsure which way to go, this brings us to the next essential step: consulting the experts.

4. Consult real estate and mortgage professionals

Given the current state of the market, you’ll want to consult a mortgage and real estate professional and get educated on current trends including interest rates, housing prices and inventory levels in your desired neighbourhood. Deferring to experts will help guide you toward decision-making that’s tailored to your unique financial circumstances, versus a one-size-fits all approach. Our team at Homewise and Homewise Real Estate works together with our clients to provide a holistic experience that walks them through the home buying process from start to finish.