Making that home ownership dream a reality

Identify properties with high “walk scores” or those near transit. Not needing to drive can improve your cash flow and increase your borrowing power. The B.C. Automobile Association estimates the cost of owning and operating a 2023 Honda Civic to be about $625 a month for an average 10,000 kilometres a year. A monthly three-zone adult TransLink pass is currently $190 a month or $435 less than the BCAA estimate. This also doesn’t take into account the cost of parking or a parking stall. By eliminating the costs associated with owning a car, you may increase the size of mortgage you qualify for by tens of thousands of dollars. Many lenders allow rental-suite income to be used in qualifying for your mortgage. Having one or more “mortgage helpers” is an effective way to increase your borrowing power and get you closer to home ownership. If you are comfortable living in your parents’ home, why not buy an investment property and use the rental income to qualify for a mortgage? This is a way to build equity while your tenants cover most, if not all, of the property expenses. Living small is another way Canadians are bridging the affordability gap, while reducing their climate footprint. Given the innovations in construction and furnishings, smaller living spaces can be functional without losing some of the comforts of a larger home. Smaller homes can also shrink the operational and furnishing cost of your home, keeping more cash in your pocket. Buy what you can afford, not only what you qualify for. Lenders generally qualify borrowers based on standardized cash-flow metrics known as debt-service ratios. While you may qualify for the mortgage, these ratios do not consider your lifestyle expenses beyond shelter costs and consumer debts. Lifestyle expenses would include items like gym memberships, streaming services, travel, entertainment, clothing, charitable donations, etc. A thorough household budget will help determine what is within your means and help identify ways to trim some non-essential expenses. Buy a fixer-upper. More than just an HGTV fad, fixer-upper homes can help some people achieve their dream of homeownership. An older home with “good bones” often has a lower price tag than a modern, finished home, and may not necessarily require a total reno. New paint and flooring can quickly revitalize an older, tired residence. If you are DIY-savvy and/or willing to put in the work, purchasing a fixer-upper may get you signing a contract without breaking the bank. Dining or ordering out less can dramatically accelerate home ownership dreams. A couple that dines in a restaurant or orders out twice a week could be spending thousands of dollars a year in restaurant expenses. When planning for a home, evaluate such expenses. Finding ways to alter your lifestyle can go a long way to grow savings and get you closer to making an offer to purchase.