Life

If you are about to buy your dream home but haven’t asked yourself the right questions, you might be heading into a nightmare instead. Our personal finance expert Rubina Ahmed-Haq is here to make sure that doesn't happen!

Can I afford it?

This is the first thing we all think of when considering buying that dream home. While the mortgage is the biggest slice of the pie, people sometimes underestimate the other slices.

Remember when considering your mortgage that interest rates change—so always calculate your mortgage interest at two to three per cent higher than the rate you are offered. This way—whether you are in an open mortgage or a short term—you will know what you’ll be able to afford. Bonus points: if you pay your mortgage at that higher rate you will have less of the loan left at renewal time and make fewer interest payments. Now that's pretty dreamy!

The other pieces of the pie include property taxes (which can be higher for your dream home than your current home), new utility costs, and unexpected repairs. Factor all of these in when considering affordability.

Does it suit my lifestyle?

Make sure your dream home—as beautiful as it is—is laid out to actually suit your lifestyle. Does this house serve your needs? Take a moment to think about what every day of the week will look like in this house, how the rooms you spend time in now fit your family, whether the way you entertain suits this home, and whether street parking will affect you negatively.

What is my 5, 10, 15 year plan?

Ask yourself where you will be in five years, ten years, and 15 years and will this house still work—unless you plan to move within that time. Are you planning to have more kids? Are your kids moving out soon? Will your children have kids and will they be staying with you often? A dream home often means the home you want to live in the longest; if so, make sure it will suit all your long term needs.

What will my daily commute look like?

Before you buy the house, visit it on a weekday and see what the commute to work will be like. Can you handle it? If it is too long it can become a major stress factor. If you plan on taking public transit but find it inconvenient, you might end up buying a car, adding around an extra $10,000 to your annual costs.

What is wrong with this house?

There is always something less than perfect about the house you are going to buy. Often, we discover that after we move in and then spend money to fix it. The solution? Find the problem before buying!  Renovations to that main floor bathroom, new landscaping, and adding a deck are all obvious costs. But ask your new homeowner friends about what repairs took them by surprise and check for those problems in your potential house.

It can be hard to find a fault in a house that you see as perfect, but there is always something that is not just right that you will end up spending money to make it right!