6 Reasons Why Waiting to Buy a Home Is Not a Good Idea
There are plenty of reasons to wait to buy a new home. You might want to save up a bit more for your down payment, spend some time improving your credit score, or think a little more deeply about what you want your new home to look like.
However, there are also some good reasons why you should act quickly when you know what you want. Today, we want to discuss some of the reasons you may not want to wait to buy your new home.
Community Availability
The most popular communities always fill up quickly. Currently, some only have a few lots left. While the closing of one new neighbourhood often means the opening of another, it’s clear that you need to act quickly if there’s a particular community you really want to live in. If you wait too long, there may no longer be any space left in that community.
It’s also important to note that neighbourhood development is spreading outward. The longer you wait to build your home, the higher the chance you’ll need to choose a community that’s a bit further from the central area. Most new communities are built near major highways, but if you work in the downtown area, you could have a longer commute the further outside the city you live.
Home Style Availability
Along the same vein, waiting to buy your home can limit your choices, especially if you have a community you really want. In each community, there are certain areas that are designated for particular styles of homes. For instance, you couldn’t put a laned home in an area that’s supposed to have a front-attached model.
Even when you are able to get the type of house you prefer, you might have restrictions pertaining to the look of the exterior of the home if you’re putting your home in the last available lot. New developments have specific community guidelines, and that means even though you got the lot and model style you wanted, by waiting you could miss out on the exterior siding colour you like. Those who care deeply about the exterior design will want more options.
Potential Mortgage Rate Hikes
You never know what can happen with mortgage rates. Over the past year, the rates have been steadily increasing, and those who were able to buy their homes a year or two ago are likely happy that they were able to do so. When you wait to buy your home, you may have to deal with higher interest rates.
What if mortgage rates go down? That’s a valid concern. You might worry that if you had waited, you would have been able to get a better rate. Fortunately, it’s often possible to refinance a mortgage in order to take advantage of those lower rates.
Missed Opportunities to Build Equity
Every time you make a mortgage payment, you’re building up some equity in your home. Sure, it might not be much in the first few years of home ownership, but every little bit counts. If you currently own your home, you are building equity each time you make your mortgage payment, but those who are renting can feel like they’re throwing money away. It’s often smarter to get into a position where you’re building up your equity as soon as possible.
Changing Promotions
Most builders offer deals on a regular basis, but when you wait to buy your home, you could miss out on a promotion that could have saved you a lot of money. Promotions tend to be best when the builder is trying to get a new community off the ground, so if you’re joining later, you won't' have the opportunity to take advantage of it. There’s no guarantee the builder will offer the same promotion in the future, especially if it’s a good one.
Higher Prices
In 2018, mortgage rules in Canada became stricter, and this meant that many Canadians weren’t able to qualify for as much money as they would have qualified for in the past. These changes slowed the market a bit, so builders had to be competitive by keeping their prices down.
In some cases, this was reducing their profits.
Now that the market is starting to pick back up, it wouldn’t be surprising to see the real estate market follow suit. If you wait a year or more before buying your new home, you may see some increases. Keep in mind increases can often occur by building materials costing more as well!
Of course, everyone has to consider their own personal finances to determine when it’s the right time to buy a new home. For some people, waiting a bit longer is the better choice. For those who are financially ready to take the leap, though, it’s better to buy a home as soon as you know what you’re looking for.
