Saving for the down payment, getting pre-approved for a mortgage, finding the right home, bidding on the property, negotiating a fair price and selling your current home are only a handful of the factors that need to be dealt with when buying a new home. Before even moving
Before even moving in, there are any number of variables that can unwittingly cloud long-term personal savings forecasts. Yet, is buying a home without an emergency savings fund a wise decision? Or does it matter? We decided to answer that question for you so as to save you the trouble of finding out the hard way.
We decided to answer that question for you so as to save you the trouble of finding out the hard way.
A recent survey found that roughly 40% of Canadian homeowners did not have an emergency fund saved up. To that climate of uncertainty add the fact that people, unfortunately, do lose their jobs and face unexpected income drops; sadly, medical issues do come up; annoyingly, unforeseen, timely and necessary home expenses do prop up like pesky garden weeds, at times costing a good portion of the household budget to fix.
To that climate of uncertainty add the fact that people, unfortunately, do lose their jobs and face unexpected income drops; sadly, medical issues do come up; annoyingly, unforeseen, timely and necessary home expenses do prop up like pesky garden weeds, at times costing a good portion of the household budget to fix.
While any of the above examples can help to effectively highlight the downside of having no emergency savings when entering home ownership, perhaps none is more significant than the last item on the list. As evidence, a 2007 Pew Research poll found that 34% of
As evidence, a 2007 Pew Research poll found that 34% of homeowners experienced unexpected expenses in the prior year. Again, this point underlines the need for an emergency savings fund when buying a home.
Justifying the fact you have no savings banked when embarking on a major financial venture like home ownership can prove to be a poor play. Though many Canadians are convinced having a credit card cash advance or the capability to borrow from family members constitutes a sound
Though many Canadians are convinced having a credit card cash advance or the capability to borrow from family members constitutes a sound backup plan, the opposite is true. The latter can put a significant strain personal relations and a cash advance is only as of value if you have the ability to pay it back in quickly.
Of course there are at times instances when people, on a count of circumstance, disprove the above truths, most experts agree that if you are buying a new home it is important to have an emergency savings fund.
Conservative estimates are to have six months of savings banked before buying, but we feel savings to cover three months’ expenses should provide plenty of cushion in the event extra capital is needed.
