TD survey finds 60% of Canadians are willing to exceed their budget to buy a home.
Budget-schmudget. At least that appears to be the sentiment of Canadian homebuyers, according to a new TD home buying survey. Of those polled, 60% said they would be willing to exceed their budget, with more than half (56%) saying they would be willing to go over budget by up to $50,000. TD largely blames the emotional rollercoaster that comes with house hunting for our willingness to break the bank. This willingness however to spend more now, often leads to regrets later.
The survey also found that 97% of current homeowners wish they knew now, what they didn’t know then: that there is so much more to homeownership financially, then just getting a mortgage and making payments. They wish they had factored in other financial obligations when determining how much mortgage they could really afford—including property taxes and home maintenance costs (54%), and overall lifestyle expenses (33%).
"How you live is just as important as where you live," says Roy D’Souza, Associate Vice President, Real Estate Secured Lending at TD Canada Trust. "Owning a home is a lot more expensive than buyers expect. Buyers who don't account for these extra costs are potentially putting themselves under a lot of financial stress should their circumstances unexpectedly change, and are also risking not having enough money left over to maintain their lifestyle, and continue saving for the future." As a result, TD offers the following tips to help buyers get ready for the costs associated with buying a home:
The Canadian Mortgage and Housing Corporation (CMHC) provides another reason to stay within budget when buying a home: closing costs. The CMHC estimates that typically you’ll need to have 1.5% to 4% saved up to cover things like legal fees and land transfer taxes.