Dear younger self: look before you leap into home ownership

Significant renovations, small down payments and no home inspection are among 
the top mistakes homebuyers make: RBC Poll 
TORONTO, April 29, 2013 /CNW/ - The majority (60 per cent) of Canadian 
homeowners admit they made at least one mistake when they bought a home, 
according to the 20(th) Annual RBC Home Ownership Poll. Asked to list up to 
three scenarios as their top mistakes, Canadians pointed to significant 
renovations needed to the property (15 per cent), not having a bigger down 
payment (14 per cent), and lack of a home inspection (13 per cent). 
"Unfortunately we don't get a 'do-over' when buying our first home, so it's 
important to arm yourself with the right advice to avoid unexpected financial 
costs down the road," said Rachel Wihby, strategy manager for First-Time 
Homebuyers at RBC. "Skipping a home inspection or rushing a home purchase are 
cautionary tales for prospective homebuyers, especially younger and first-time 
Homeowners also cited purchasing too quickly (11 per cent) and failing to 
account for extra costs or total cost of home ownership (10 per cent) among 
some of the wrong moves made during a home purchase. 
Younger Canadian homeowners (ages 18 to 34) were more likely than the average 
Canadian to list not having a bigger down payment as a mistake (21 per cent 
vs. 14 per cent national), according to the poll. A larger percentage of 
younger Canadian homeowners also did not think about future family and space 
needs (13 per cent vs. eight per cent national). 
Affordability and saving for a down payment top concerns for first-time buyers
The "mistakes" are consistent with some of the common concerns that current 
prospective first-time buyers face, who say they haven't purchased yet because 
they weren't able to afford it (46 per cent) or they were saving for a large 
down payment (32 per cent). 
Among these prospective buyers, almost two-thirds (62 per cent) anticipate 
their down payment will represent up to 10 per cent of the home's value. Half 
(53 per cent) said it would take up to three years to save enough for a down 
payment. This time line fits with an earlier RBC news release that showed 
four-in-10 Canadians (40 per cent) planning to enter the housing market over 
the next two years will be first-time homebuyers. 
Many first-time buyers will use their savings accounts and RRSP/TFSA for a 
down payment
Aside from taking out a mortgage, prospective buyers expect to fund their home 
purchase by putting money aside in a special saving account (48 per cent), 
using their RRSPs (25 per cent), using a tax-free savings account (23 per 
cent) or delaying other big purchases such as a car or vacation (17 per cent). 
"Buying a home is typically the biggest financial decision that most people 
will ever make, so it's important to plan ahead and keep emotions in check. 
Seek expert advice every step of the way and leave some wiggle room in your 
budget for unexpected costs," added Wihby. 
The survey found that prospective first-time buyers were most interested in a 
combination/hybrid mortgage (42 per cent vs. 29 per cent national) and were 
more likely to be looking for a mortgage that was longer than a 5-year term 
(39 per cent vs. 22 per cent national). 
About the RBC 20th Annual Home Ownership Poll
RBC is the largest residential mortgage lender in Canada. With over 1,400 
mortgage specialists across Canada, RBC has helped thousands of Canadians find 
a home. As the country's number one source of financial advice on home 
ownership, RBC conducts consumer surveys as one way to provide insight to 
Canadians about the marketplace in which they live. 
These are some of the findings of the RBC's 20th Annual Home Ownership poll 
conducted by Ipsos Reid between January 31 and February 8, 2013. The annual 
online survey tracks Canadians attitudes and behaviours regarding homebuying 
and home ownership. The results are based on a sample where quota sampling and 
weighting are employed to balance demographics and ensure that the sample's 
composition reflects that of the actual Canadian population according to 
Census data. Quota samples with weighting from the Ipsos online panel provide 
results that are intended to approximate a probability sample. An unweighted 
probability sample of 3,005 adult Canadians, with 100 per cent response rate 
would have an estimated margin of error of ±3 percentage points, 19 times out 
of 20. The margin of error will be larger within regions and for other 
sub-groupings of the survey population. 
Ka Yan Ng, 416 974-1794, Matt Gierasimczuk, 416 
Image with caption: "RBC Royal Bank provides tips to combat common home buying 
pitfalls. (CNW Group/RBC)". Image available at: 
To view this news release in HTML formatting, please use the following URL: 
CO: RBC Royal Bank
ST: Ontario
-0- Apr/29/2013 11:00 GMT
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