Are you itching to purchase real estate? Read on!

The Real Estate Bug is something slowly starting to creep it’s way into the demographic of people in my social circle. Some, not all, are beginning to move on from their “Travel Bug” brought on from graduating high school or post-secondary and onto The Real Estate Bug.

The Real Estate Bug doesn’t mean you are out writing offers on homes, nor does it mean you are about to buy your 4th pre-sale. You might not even be able to buy for another two to three years. It is instead the simple feel of being excited about the idea of owning a home soon and preparing yourself to take that leap.

More and more, people are beginning to reach out to find out what they can afford. They may be three months into their job or five years into their job. Savings have just started, or they have enough to make a down payment in the next couple weeks. Whatever the situation, younger people are becoming more interested in real estate because they know their time to buy is fast approaching.

If you don’t believe me, have a look at the scenarios below. This will show you just how much income you’ll need to afford a typical 1-bedroom condo:

Scenario 1
$300,000 purchase price
$30,000 down payment
$278,370 mortgage

Income: $65,000/yr or $31.25/hr

Scenario 2
$385,000 purchase price
$38,500 down payment
$357,241.50 mortgage

Income: $80,000/yr or $38.46/hr

Scenario 3
$450,000 purchase price
$45,000 down payment
$417,555 mortgage

Income: $91,000/yr or $43.75/hr

Now some of you reading this might be shocked at some of the income numbers thinking “how the heck am I going to buy a place when I make half of what is required?” Let me ask you this… Are you renting with someone? What is their income? Are you in a relationship? Could two of you share a 1-bedroom? Could you afford a 2-bedroom and rent out a room to help with your mortgage? Are parents able to co-sign to supplement income?

Buying with someone else immediately drops those requirements by 50%… If you would like to have a conversation, contact a Dominion Lending Centres mortgage professional near you.

Ryan Oake