(NC) The term “house poor” is likely one we’re familiar with as Canadians. Given the ever-changing housing market, it’s something you may even have identified with. But what does it really mean? And how can we avoid it?
“House poor” is a situation that describes a person who “over-extends” themselves and spends an unusually large proportion of his or her total income (roughly 30-40% or more) on home ownership, including mortgage payments, property taxes, maintenance and utilities. If you’re feeling like a disproportionate amount of your income goes towards your home-related expenses, then you might be in this group.
According to the 2019 RBC home ownership poll, half of Canadians claim they would avoid a situation where they become house poor as they say it’s mentally stressful and financially irresponsible.
However, one in four Canadians does identify this way and approximately one in ten is prepared to put themselves in this position. Here are some budgeting tips to avoid it:
Adjust your expectations. Buying a home can often be about compromise. This may mean expanding your neighbourhood scope or looking at condos or townhomes instead of detached homes. The poll found that proximity to public transit and work are compromises that most Canadians are willing to make.
Take your time. Buying a home is one of the largest financial decisions you will make. Take some extra time to make sure you have saved what you need to live comfortably and understand fundamentally what you need to buy your first or next home. Creating a budget and payment plan schedule is a great way of staying on track.
Broaden your horizons. Rate is just one aspect of shopping for a mortgage, and solely focusing on it can have negative impacts in the long run. It’s important to make sure you have the right mortgage to suit a variety of needs and the flexibility to adapt to potential changes in your life. Consider the type of mortgage, term and amortization rate, as well as factors including if this is your first house, an investment property or you are buying and selling at the same time.
See just how much you can afford at rbc.com/60seconds.
Welcome to this gorgeous home on a quiet street in desireable Blackmud Creek. Upon entering, you'll notice the bright, open feel of this home with vaulted ceiling, plenty of windows, art niches and display ledges. The living room features a cozy gas fireplace surrounded by windows. The spacious dining room offers access to the two-tiered deck looking over the large yard. The kitchen comes complete with stainless steel appliances and plenty of cupboards and counters as well as a corner pantry. This floor also offers two bedrooms and a full bathroom along with main floor laundry. Upstairs, is the master suite with his and hers closets, a massive ensuite with separate soaker tub and shower as well as vanity. And just off the top of the stairs, unwind with a good book in the unique loft nook. The basement is also fully finished with family room, theatre/den, 4th bedroom and extra access to the attached garage. Upgraded furnace, hot water tank, A/C and so much more. Don't miss this fantastic opportunity.
Welcome to this gorgeous SW CORNER UNIT condo in desireable Regent Century Park. Boasting MARBLE FLOORS and walls in both the main bathroom and master ensuite. The living room features 2 FULL WALLS OF WINDOWS, including patio doors to the balcony with GAS HOOKUP and a cosy FIREPLACE. The kitchen is complete with all STAINLESS STEEL APPLIANCES including a large 5-BURNER GAS STOVETOP, hood fan, wall oven, built-in microwave, fridge and dishwasher as well as gleaming GRANITE COUNTERTOPS and modern cabinetry. The 2-bedroom suite includes a spacious master with WALK-THROUGH CLOSETS and a 5-PIECE ENSUITE with HIS/HERS SINKS and separate MARBLE-TILED SHOWER and DEEP SOAKER TUB. The building is well-maintained and features a spectacular grand entrance. A WELL-EQUIPPED GYM on the 2nd floor completes the picture. Ideally located steps to the LRT and shopping and next to the planned ProCura mixed-use urban development. Complete with 2 TITLED UNDERGROUND PARKING STALLS and a TITLED 6'x5' STORAGE LOCKER.