Ravi Punia - REALTOR®

Fraser Valley Specialist

FRASER VALLEY REAL ESTATE BLOG POSTS

First-Time Buyers Should Budget Carefully


The huge run-up in prices in Fraser Valley real estate during the pandemic has simply priced many would-be first-time homebuyers out of the housing market.  Those first-time buyers that do still have the financial capacity to buy a Fraser Valley home should be prudent and cautious in their financial planning.


It is expected that interest rates are poised to begin a cycle of increases in Canada, starting in the spring of 2022.  It's being reported that the interest rate increases will be many, over the next couple of years, at least.  Therefore, new buyers of Fraser Valley homes should budget accordingly.  Ask yourself, "Can I afford a mortgage rate that might be double what I can obtain right now?".  Even though buyers are stress-tested on paper, for mortgage qualification purposes, it's quite another thing when one has to actually pay higher mortgage payments.  The squeeze and pain of higher mortgage payments gets real, real fast.


Higher mortgage rates means you pay down less of the principal with each payment, as a greater proportion of your payment goes towards the interest.  This can really slow down your timeline to repay a mortgage.  The burden of high debt can be painful and long-lasting.  Moreover, it is important to maintain an overall life of financial balance. 


The goal of life shouldn't simply be home-ownership.  Home-ownership should fit into your overall financial plan, where you also have money available for an emergency fund, perhaps advanced education and maybe most importantly, retirement savings.  


I highly recommend that first-time homebuyers, in what are now very expensive Fraser Valley housing markets, proceed with great caution and careful planning.  It is one thing to aquire a home using extreme leverage, it is quite another to maintain the ability to carry the property without being crushed under the heavy weight of debt.


If interested, I can do my best to assist you in finding a condo, townhome or detached home that might fit your financial profile, in a balanced and sustainable way.  The Fraser Valley still has options for many first-time buyers.



*This blog communication is not intended to cause or induce breach of an existing agency agreement.  Views are my own and do not reflect those of any organizations that I may be associated with.

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