The Quiz

Buying a house is one of the largest purchases most people will ever make.  Before you even apply for a mortgage, it's a good idea to know if you're ready to take the plunge into borrowing a substantial amount of money and taking on the responsibilities of home-ownership.  It may take some sacrifices; are you willing to change your lifestyle significantly, if need be, to maintain a home financially and physically?

Photo by Philippa Willitts

Finances being the crucial question, it's a good idea to consider your current financial situation.  Do you have…

• A continuing and reliable source of income?
• A decent credit history?
• Manageable total debt?
• Some money saved for a down payment and closing costs?

If you answered yes to these questions, then take our quiz!

1. The main reason I want to buy a home is:

   1. I want to start building up my own equity instead of continuing to pay rent.
   2. I want the freedom to decorate and renovate the way I want.
   3. The housing market is hot now and I want to buy in.

2. I plan to stay in Calgary:

   1. More than five years.
   2. Two to five years.
   3. Less than two years.

3. I know that investing in a home:

   1. Has its risks, and I need to be prepared for real estate cycles.
   2. Should provide me with at least as good a return as investing in the stock market.
   3. Always provides a great return on my investment since the price of houses is always going up.

4. I can make a down payment on a house:

   1. For sure - I've already saved enough to put 20% down on a home in my area.
   2. Possible, provided I can qualify for the CMHC insurance.
   3. If I borrow the minimum down payment.

5. I can afford the cost of owning a home:

   1. Just fine - I already earn enough to cover the monthly mortgage payment, taxes and annual maintenance expenses.
   2. I can afford to meet the carrying costs of a home if I tighten my belt and give up some frills.
   3. I would have to take a second job to cover the cost of a mortgage and home maintenance.

6. In case the unexpected happens, like an accident, illness or job loss:

   1. I have insurance or savings to protect my assets.
   2. I scramble, but I always seem to get by.
   3. I tend to fall behind on my financial commitments.

7. My income is:

   1. Dependable and predictable.  I have a steady job with realistic expectations of future pay raises.
   2. Stable, for now.  I am currently employed but thinking about a change of career.
   3. Variable.  My job is a bit uncertain at the moment and my income fluctuates.

8. My current level of debt is:

   1. Low.  I pay my bills on time and try to pay the whole balance on my credit cards each month.
   2. Reasonable.  I usually carry debt on my credit cards but I always pay the required minimum each month.
   3. High.  I sometimes have to juggle from card to card to pay the required monthly minimums.

9. Houses need regular upkeep, inside and out.  I plan to:

   1. Set aside funds to cover the cost of ongoing maintenance.
   2. Do as much of the work myself as I can.
   3. Rely on friends and family to lend a helping hand.

10. My understanding of the housing market is:

    1. Solid.  I've already researched the cost of houses in my area.
    2. Reasonable.  I always skim through the real-estate listings in my local newspaper.
    3. Good enough.  My friends say it's a great time to get into real estate.

Now add up your answers…

If you answered mostly A's, chances are you're ready for home ownership.  You've done the research and are prepared financially.

If you picked mostly B's, you're getting there, but still have some work to do.  We would be happy to discuss a game plan that will get you completely ready for homeownership by a target date.  A condominium, which is usually more affordable and requires much less in the way of hands-on maintenance than a home, might be a good option for you to enter the housing market.

If C's were your main choice, you should probably hold off on buying a home until you get your life and finances more in order to handle such a major commitment.  Consider meeting with a financial advisor for tips on how to pay down your debt and create a savings plan.