Should You Buy a House? (First Time Home Buyers)

If you're interest in buying your first home, you're probably wondering how much home you can afford, and what you can expect to pay on a monthly basis. Today's video aims to offer valuable rules of thumbs and things to ask yourself before making the purchase.

DISCLAIMER:
This channel is for education purposes only and is not affiliated with any financial institution. Richard Coffin is not registered to provide investment advice and as such does not provide recommendations on The Plain Bagel - those looking for investment advice should seek out a registered professional. Richard is not responsible for investment actions taken by viewers.

[matthewmatthew]

3x income and 30% rule *checks* yeah that will probably buy a half-decent parking space here

[firebfi]

I’m 16 and watching this video makes me feel like a middle-aged man

[PradedaCech]

Loved the jab at Graham Stephen at the end. :D

[HowMoneyWorks]

If you’re watching this and are not subscribed, what are you doing? Just watching his videos makes you better with money. Get this guy to 100k!

[matthieu]

Hi Richard, you take the time to put together great videos that are well documented, researched and made, so I wanted to take the time to thank you for that. Finance is not only my job but my passion, and watching your videos always teach me something, give me a new perspective on things or allow me to share this passion with people I love, usually because you explain the concepts way better than I would be able to or because you address the different topics with such a fresh look. Thank you, I'll keep watching and sharing your content, and I'll be supporting you through Patreon going forward. Have a good day :-)

[josejaviergordillo]

I think the 30% rule is a good start, but I go with the monthly house payments shouldn't be more than 33% of your POST tax income. It's slightly more conservative

[squishtomar]

Love that these videos are high quality and Canadian related.

[bartsimpson]

The 30% rule is actually the standard used by banks here in South Africa when determining affordability.

[xzjulius]

I actually love your channel and I hope you keep going!

[billschlafly]

When I was a child back in the 70s and 80s I realized that "rich" people owned their homes. Twenty-six years ago I bought my first house. I was 23 and I was scared to death. Before we bought, our agent tried to convince us to spend more than our rent because we qualified. We got a new agent. Be careful out there. Learn the market. If properties are going faster than you can think then let it go. Emotions are not your friend when you are trying to make a strategic decision. Since then I've owned 7 and sold 6 homes. Most were winners...none were losers. Good luck.

[mykola]

Im in Australia and my first place was like 9.4 x my salery

[georgegoucher]

Loved the first 30 seconds of this video (in addition to the rest!) so many get rich quick of real estate videos floating around youtube, glad to see the sobering sanity of your advice! Keep up with the great videos, been watching since the original 12 episode series and plan to keep going!

[Gorlokki]

Be careful of buying a house together with a girl/boyfriend, that can backfire HARD if the relationship doesn't work out

[CG_Hali]

Great video and info. Before we bought, we also checked our budget for a stress test at 10% interest rates (I remember my parents dealing with that huge hike in the 80's on their first house), and we also made sure we could still handle things if one salary was to go away for a while. Emergency funds and putting away money in advance for all maintenance like snow plowing for the season before the season starts, etc.

[elusivemonk]

In London it's about 15x the average wage... 3x rule won't work 😂

[Not.a.bird.Person]

Great video! In hindsight (although this was hard to see coming 2 years ago), the real estate bubble that is occuring right now should deserve at least a warning to everyone looking to buy for the next couple years. Realtors will try to get you to pay unfair prices for real estate, do not fall for it too easily. Consider your options, your options are always open when you keep your money. They lose more by losing your business than you lose by not purchasing the house they want to make you pay 100k$ over asking price. Your liquidity is worth more than the illiquid asset financed with debt the current owner can't afford and is trying to pass on to you. He should be cutting his loss, not trying to make a buck on you. Never forget YOU hold the power when you hold the money and more time without a house simply means a higher down payment and less interests to pay.

[sommi]

❤️💙💚💛 3x income rule will get you a VERY nice parking spot here in Sydney. ❤️💙💚💛

[alxnumsayn]

This is actually one of my first times commenting on YT... This channel is awesome! Thanks for the awesome content. Very insightful!

[UmTheMuse]

Morningstar had a very interesting paper on whether buying is a good investment titled, "The Home as a Risky Asset" by David Blanchett PhD, CFA, CFP®. As you can guess from the title, they were pretty negative about the idea, especially for those who don't itemize deductions. They conclude that, once you account for expenses, your real rate of return is around 1%. One percent! Now, that doesn't necessarily mean that renting is inherently better for your wallet. I think the actual take-away is that you should never buy more house than you need, with the expectation of selling the property later for more.
On the other hand, also remember that a home can be very hard to sell when you need to. That's both a strength (you're not tempted to cash in) and a weakness (sometimes you have no choice).

[rogofos]

In Russia real estate is cheaper and government dont really provide much of protection in rent.
So here the choise is obvious.