Owning a Home Today Is Possible: Credit, Down Payment and Income

“Owning a home nowadays is impossible.”

It can feel that way, but it’s not true. According to Joe Gonzalez, buying a home comes down to three main factors: your down payment, your credit score and your income. Here’s how they fit together for an entry-level home in Niagara.

1. Your down payment

An entry-level home in parts of the Niagara region can be found for around $400,000 or less. In Canada, the minimum down payment on a home at that price is 5%, so:

• 5% of $400,000 = $20,000
• Plus about $5,000 for closing costs
• Total: roughly $25,000

Saving that much isn’t easy on a modest income, but with discipline and sacrifice it is possible.

2. Your credit score

Lenders want to see that you handle credit responsibly. You can build your score by:

• Having a credit card, and possibly a line of credit
• Making every payment on time
• Keeping your balances low

3. Your income

This is often the toughest part. As a rough guide from Joe’s video, qualifying for a mortgage on a $400,000 home could take a household income in the range of $100,000, depending on rates and your other debts. Your mortgage broker can give you your exact number.

How people are making it work

• One higher-paying job. Not easy, but possible.
• Combining incomes with a spouse or partner, for example two incomes of around $50,000 each.
• Buying with others. Some people team up with friends or family to buy together. If you do, put a written agreement in place that covers what happens if someone wants out, so there are no misunderstandings later.

Why getting in matters

Over time, real estate has historically gone up in value. Getting into the market, even with a modest starter home, lets you start building equity instead of paying someone else’s mortgage.

Ready to make a plan?

The Right Choice team can help you figure out exactly what you need to buy your first home in Niagara.

Call 289-276-1716 or start your home search.