By Rita Jethi
TORONTO: The biggest mistake that newcomers to this country make is to buy a home immediately on their arrival on the advice of some ill-informed advisors. These advisors tell the newcomers: rent is a waste of money, so you better buy a home and use this money to pay your mortgage.
And therein lies the trap.
Back home in India or Pakistan or wherever you come from, owning a home is a cultural compulsion. But you don’t have such traps in those countries that await you here. If you are buying a home on someone’s advice without doing your own homework, you are creating a big problem for yourself.
Moving to a new country is a big transition for yourself. So don’t take it lightly and don’t bank on people’s advice when it comes to making your biggest investment – which is buying a home. You don’t know your neighborhoods. You may not have a stable income for a long time. You don’t know how much your family expenses will be.
OK, you may have brought enough money to pay your down payment. What if you can’t afford to pay the monthly installments after some time? What if you lose your job or source of income?
Further, home buying is not all about down payment. Do you know how many other additional expenses you will have to meet once you buy a home? There will property tax. There will be insurance. There will be maintenance costs. There will be repair costs. There will be utility costs. There will be closing costs.
From my experience as a real estate person and an insurance agent, I find that people are ill-informed when it comes to buying a home. They make a quick decision on the basis of what someone told them. They buy bigger homes and undertake bigger mortgages. Which means working extra days to pay off the monthly installment.
What happens when you work extra days and hours? You ignore your family. Your marital relations get strained and kids go astray as you are not available for your partner and children. Believe me, this is the story which is repeated in so many immigrant homes. Then people start blaming this country for causing them all these problems. This country didn’t ask them to come here.
So my advice to new immigrants who are in haste to buy a home it this: don’t ignore your family. Your family comes first.
After this, your first priority should be to find a stable job or a regular source of income. Consult a financial and mortgage planner and start accumulating money for your down payment.
Meanwhile, try to know this country’s financial system and neghbourhoods where you plan to buy a home.
Don’t bank on anybody’s advice. Do your own homework. Once you know that you have a regular income and you can meet all your financial obligations, then go ahead.
Roughly, I would say that an immigrant should take a year or two to buy a home. Don’t be in haste and don’t follow half-baked advice that will definitely land you in trouble.
(Rita Jethi is a real estate practitioner in the GTA)