Single homeowners represent a quarter of Canadians buying or intending to buy a home, according to a new TD survey. A large part of this trend is driven by unexpected life circumstances, with Canadian homebuyers who are divorced (69%) or widowed (35%) saying they are more likely to purchase a home on their own, along with a growing number of single Canadians who say they'll go it alone (67%).
"Buying a home can be daunting for people who want to buy solo – but it doesn't have to be," says Marc Kulak, Associate Vice President of Real Estate Secured Lending at TD Canada Trust. "Whether you find yourself in a solo buying situation unexpectedly or by choice, there are ways to make it happen. Seeking advice from a mortgage specialist and having a solid plan – including understanding how you'll afford your home over the long-term – is the best approach to feeling confident as you shop for a home, mortgage, insurance and that new sofa."
Of the one in four Canadians who intend to buy independently, 86 per cent say they are confident in their ability to comfortably afford maintenance and ongoing costs of home ownership. And this shouldn't come as a surprise given that Canadians planning to go in alone are already thinking through the associated costs – seven in ten single Canadians say they thought about property taxes (76%), home insurance (72%) and maintenance (70%) before purchasing their home, while two-thirds (67%) considered utilities. Only nine per cent did not think about any of the costs associated with of home ownership before starting the purchasing process.
"Whether you're buying on your own or as a couple, markets across the country can be challenging and you may not get everything you want," says Kulak. "So, consult with a mortgage professional to find ways to make the process more affordable and achievable, and ultimately to attain your home owning goal."
To help make solo home ownership a reality, TD offers some creative ways to help a single buyer successfully make one of the biggest purchases of their lives.
- Buying solo doesn't mean living solo: Just over one-quarter (27%) of single Canadians who have or intend to purchase a home alone say they did or would consider having a tenant to make solo home ownership more affordable, while just under one-quarter (23%) said they did or would consider a roommate. Having rental income can help pay down the mortgage principal more quickly. Be sure to qualify for your mortgage without rental income so you have flexibility if you decide a roomie or tenant is not for you.
- Think beyond the picket fence: Before you make any commitments, do your research and seek out professional financial advice to know what you can afford. For example, you can check out the TD Mortgage Affordability Calculator online to see what budget works best for your situation. Remember, it's not just a mortgage payment you have to manage – other costs including property taxes, insurance, and ongoing maintenance will add up. Your mortgage payments should be low enough so you can take care of all your monthly expenses, meet your savings goals and still have some wiggle room. It's also important to have a contingency budget or slush funds set aside, to cover off emergencies and household maintenance.
- Protect your investment: As a new home owner or landlord, it's important to protect your newest and biggest investment. Be sure to research what type of insurance coverage will best fit your needs and give you peace of mind. For instance, fire replacement coverage is something people typically think about, but, depending on where you live, you might also consider sewer back-up and ice damming coverage. For example, even newer neighbourhoods can have issues with water backing up into basements, if grading and drainage are not well managed. And finally, remember to tell your insurer if you decide to rent out part of your home, make any renovations, or other changes as this will affect your coverage.
- Enlist a home-buying buddy: If you're on your own, it's important to have a support system in place, like a trusted friend or family member, throughout the process of buying a home. Having support will help you stick to your home-buying plan and can provide an objective voice as you visit properties, negotiate and close on a property, and set up your new home.
"From personal experience, I know being creative – and realistic – on ways to afford to own a home is going to get you in a home faster," says Kulak. "If you're looking to make the big move, speak to a mortgage specialist about your individual needs and make a solid home-buying plan before you visit that first open house."
About the TD Survey
TD Bank Group commissioned Environics Research Group to conduct a custom survey of 6,020 Canadians aged 18 and older, including 1,129 single Canadians who have purchased a home alone or would like to purchase a home in the future. Responses were collected between February 9 and 16, 2017.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, to credit protection and travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as in over 1,100 branches, with convenient hours to serve customers better. For more information, please visit: tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America. Mutual Funds Representatives with TD Investment Services Inc. distribute mutual funds at TD Canada Trust.