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What are my mortgage options? How much should I budget annually for home expenses? These are examples of what women homeowners wish they had known more about prior to buying a home, according to the third annual TD Canada Trust Women and Home Ownership poll.
The results of the survey yield some good advice for anyone thinking about entering the housing market this spring.
For instance, 25% of women homebuyers surveyed wish that they had learned more about their mortgage options. TD Canada Trust’s Chris Wisniewski reminds buyers to allow themselves enough time in advance to research their mortgage options.
“Once you put in an offer, things will move very quickly,” Wisniewski says.
The type of rate and length of term you choose, he says, “will depend on your comfort with interest rate fluctuation and your ability to carry a higher mortgage payment if interest rates rise.”
TD Canada Trust has a mortgage selection tool to help potential homebuyers identify the type of mortgage that might be right for them.
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Another important consideration is the down payment. Wisniewski urges buyers to think about making a down payment greater than the typical 10%
“It will make a big difference to the amount you’ll end up paying over time,” he says. “Think of it as short-term pain for long-term gain.”
He further recommends choosing an amortization period shorter than the standard 35-year period, if at all possible. “You will dramatically reduce the amount of interest you pay over time,” he says. “On a $200,000 mortgage, switching from a 35-year amortization period to a 25-year period could save you $170 per month and could take 10 years off your mortgage.”
Aside from the issue of financing, more than a third (36%) of the women surveyed said they wish they’d asked more questions about the fees and costs related to buying a property.
Wisniewski says buyers should estimate their closing costs to be the equivalent of 1.5-4% of the cost of their home. Closing costs usually include legal/notary fees and disbursements, property land transfer taxes, as well as adjustments for prepaid property taxes or condominium common expenses (if applicable).
A further third (30%) of respondents in the survey indicated that they hadn’t calculated the annual expense of maintaining a property.
From parking permits and electrical bills to property taxes and home insurance, it is helpful to accurately estimate these costs prior to purchasing a home. Wisniewski recommends making a budget and planning monthly housing expenses to be less than a third of your monthly household income (including mortgage payments, taxes, heating costs, etc.).
Finally, Wisniewski recommends hiring a qualified home inspector, citing the 43% of women surveyed who felt the biggest headache they faced in home ownership was the cost of maintenance and repairs. A proper report from a home inspector can prevent buyers from purchasing a property that will require major repairs in the short term. Home inspectors can also provide a report about regular maintenance tasks that will be required for a home over the long term.
The TD Canada Trust Women and Home Ownership poll, conducted by Angus Reid, surveyed over 1,000 women across the country who have purchased a home independently.