Landlord Sells. Tenants become First Time Buyers
Imagine this. You and your partner have been happily living together for a year or more. You're in a rental property in an area you love and you're thinking about buying a place in a year or so.
Then, one day the landlord says he's going to sell and you'll likely have to move in 3 to 6 months. Now what do you do?
Do you find another rental? Or do you rush out and buy something even though it wasn't in your plans for another year? And what if you don't have the down payment you think you might need? Besides, how do you go from renting to owning anyways?
Deciding if you should go from renting to owning
I'm not going to suggest that there's only one right answer here. And I can't imagine what the 'perfect' solution will be for you, considering the many financial and relationship issues that could apply.
First of all, call a Toronto Real Estate Agent that you trust. That's right, call a Toronto Real Estate Broker - first. A big part of our business is connecting people. Your Real Estate Agent can connect you to a mortgage specialist that can qualify you over the phone, and they'll lock in a preferred rate for you the same day. Now you're protected against rising mortgage rates for up to 4 months. And the mortgage specialist can tell you on the spot, how much of a house you can afford, what the carrying costs will be, how much downpayment you'll need and what programs (if any) apply to reduce your closing costs. No need to book an appointment a week in advance to go into a bank branch!
Next, call your financial planner if you have one. Discuss whether it makes sense to use your RSP's as part of your downpayment, and how home ownership will improve your net worth, even if it lowers the balance in your RRSP .
Then call your Realtor and ask him/her for a tour of homes in your preferred area and price range. See at least 6 homes just to find out if there's something on the market that would work for you if you did move forward. Chances are, if there's something on the market today that would 'work ok', there's a very good chance you'd find the house you love in a month or two, tops.
At the end of the day, have a nice dinner and a glass of wine with your partner, discuss your options and see how home ownership feels on a 'gut level'. This entire process should take less than a week. And while there's a lot more to consider before you actually buy your home, this exercise should bring your anxiety levels back to normal. (Don't forget the glass of wine.)
Most of all, the sooner you find the path to owning your own home, the sooner you'll quit wasting money on rent and start building your own equity.