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Singles guide to home buying

"The goal of having three to six months expenses in reserve is very difficult for singles to put aside," he adds.

And, adds Siegle, many first-time buyers often don't look beyond what money is needed to get into the market and qualify for a mortgage.

Not a liquid asset
While buying can still be a good investment, Karasick notes that there's pressure to buy and a "perceived stigma in renting; that if you're renting you're missing the boat somehow. We've had a very robust market so people feel they have to get in now."

The other point Karasick makes is that while owning property is an investment, one which can grow over time, there are two things to keep in mind:

  • Real estate prices don't always rise (many experts are predicting a downturn or correction ahead), and
  • Property isn't a liquid asset -- your savings should be readily accessible, preferably in a product with tax advantage.
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With today's low interest rate and hot resale market for the recent period, "we caution younger first-time buyers that prices don't only move in one direction. And when real estate does move down, it can be for several years," says Karasick.

He says younger buyers haven't seen such a downturn, or the sky-high interest rates of the late 1980s, but they need financial counselling that looks beyond the immediate. "It's not just a matter of what you can afford now, what mortgage you qualify for now," he cautions.

Grinnell says he has some of the bases covered. "I do have some savings set aside, partly from borrowing more on the mortgage than I needed." However for long-term increases such as one-time condo repair assessments, he's relying on finding a higher paying job in the near future.

Also, he admits to incurring expenses he hadn't planned for when moving into his own home. "I made some repairs and improvements I hadn't counted on doing, and likely wouldn't have done if I was renting."

His other plan, he says, is not to remain single for much longer.

Diana McLaren is a writer in Toronto.

-- Posted October 22, 2012
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