Advantage of Owning a Home

After years of planning and saving up, you’re almost ready for your major investment – a home. This was until the pandemic changed our everyday lives, as well as the world’s economic situation. Nowadays, the idea of purchasing a home has become even more intimidating than it already was.

A home is more than just a roof above your head. When you invest in a house, you’re also investing in your security, comfort and space for growth. You’re investing in your belongingness within a community.

Homeownership also comes with the opportunity to gain financial stability and predictability. This will help stabilize your finances and offer you an opportunity to save up in the long run. Speaking of long runs, you’ll also be able to build the equity in your home (or its probable market value, minus the liens such as a mortgage) over time. In short, buying a home is a financial investment as much as it’s a personal one.

There’s much to plan and explore, especially with 2020 when we experience turbulent times. Hang on and pursue your dream home. Here are some tips for purchasing a home in 2021

5 Tips for Home Buying in 2021

1. Check your financial readiness

Is there a right time to purchase a house? Will it need some mystical signs, coincidences or out-of-the-blue opportunity. It may or may not, but one thing’s for sure, the right time to purchase is when you’re financially ready.

How would you know if you’re financially ready? Many first-time home buyers don’t have a full grasp of the cost of owning a home. Having a financial plan will help you out. This plan should consider your financial capacities and vulnerabilities. It should help determine how much you can afford. The general rule is that it shouldn’t cost you more than two and a half times of your income.

You should also consider the other costs of homeownership, such as taxes and legal fees, maintenance, emergency funds and other related costs

2. Seek mortgage pre-qualification before house hunting

One of the most common mistakes first-time home buyers commit is pre-qualifying for a mortgage after house-hunting. This is a risk because you may find yourself not qualified for a mortgage. And that’s a waste of time, effort and resources trying to find a house and end up not qualified to acquire it.

To avoid this, it’s recommended to work with a trusted mortgage broker and pre-qualify for a mortgage. This will help prepare you for your future house hunting and negotiations.

3. Make sure you have complete documents

When applying for a mortgage, you’ll need to prepare and organize the following documents:

  • Government-issued identification card (passport, driver’s license, professional license, etc.);
  • Proof of employment and income (payment slips, letter of employment, bank statements, etc.);
  • Proof of down payment (bank deposits, savings accounts, gifts, inheritance, sale of property, etc.);
  • Information regarding other assets;
  • Information about your debts and other financial obligations (property loans, student loans, child support, etc.).

4. Know the types of mortgages available for you

There are different mortgage types, depending on your financial needs.

First, you have a choice between an open or a closed mortgage. This refers to the level of flexibility for the repayment of your mortgage. A closed mortgage has a fixed term with little to no room for renegotiation, while an open mortgage is generally more adjustable, but with a higher interest rate.

There’s also the conventional mortgage, which is the traditional type of loan, where the down payment is 20% or more and the loan amount will be 80% or less. Fourth is the variable rate mortgage where the interest highly depends on the current prime rate.

A convertible mortgage is an agreement made at the beginning of a term that allows homeowners to change the type of mortgage during the term.

Lastly, there’s a reverse mortgage, wherein you’re allowed to borrow money from your home’s equity. This is perfect for retirees and long-time homeowners.

5. Seek advice from a mortgage professional

Home buying during these times is a lot more challenging. Home prices and interest rates are fluctuating with banks and lenders implementing stricter approvals. But that should not stop you from achieving your dream home.

There’s help you can get. An experienced mortgage broker can assist you in making important home buying decisions. You can minimize the risks of making the wrong decisions and can save you a lot of resources along the way. A broker will help you understand and maximize market opportunities, while fully respecting your financial goals.


This may be a lot to take in, especially with all the economic instability. Moreover, in purchasing a home, there’s no one-size-fits-all financial plan for every situation. Smart buyers who were able to save thousands of dollars in their purchases have one thing in common: they have a full understanding of their circumstances.

Get started with Daisy Raouph today