If you’re a renter you may be a fan of not having the responsibilities of homeownership and the freedom to move as you please. Most people, though, reach a point where they really want a home of their own.
If you want to boost your financial security, buying a home is a great way to do so. Paying your mortgage off means building equity, which is a valuable financial resource.
With mortgage rates being so low right now, it's a good time to make the move from renting to buying. Are you interested in buying, but aren’t sure if you’re ready?
Here are 4 Signs You’re Ready to Stop Renting a Buy a Home
1. You’re tired of high rent prices.
A one-bedroom apartment in Sarnia costs nine hundred ninety-five dollars per month on average, while a three-bedroom apartment costs twelve hundred eighty-nine dollars on average. Rent keeps rising, which makes it hard to save for your financial goals, like homeownership. If you feel you’re spending too much on rent and want to build equity, you need to look into the possibility of owning rather than renting. Making a strict budget for saving for purchasing a home while you are renting can seem daunting, but it is one of the smartest things you can do. Every bit you can save will bring you closer to homeownership and building equity. If you
Check out Sarnia’s rental prices: https://www.rentboard.ca/rentals/rental_rates.aspx?locid=4749
2. You can afford the extra costs of homeownership.
The lack of responsibility when renting can be nice. When stuff breaks it's your landlord’s job to fix it. They look after property taxes, maintenance and insurance, et cetera. When you own a home, these things and much more become your responsibility to both fix and pay for. You’ll have new expected costs and new unexpected costs arise. If you’re earning more money or have saved adequately, you may have enough to cover the expenses of homeownership.
3. You can afford the down payment and closing costs.
Funding the downpayment is most people’s biggest hurdle when it comes to homeownership. When you consider five percent is a fairly standard down payment, and the average home cost in Sarnia-Lambton is above three hundred thousand, down payments could cost fifteen thousand dollars or more. This isn’t always the case though, as there are cases where buyers can get a mortgage with a zero percent down payment.
Buying a home is a legal transaction, and lawyers have an important role to play in the real estate transaction and need to receive compensation for their work. Standard lawyer fees for purchase costs are nine hundred dollars and up for purchases under two hundred thousand dollars, and are twelve hundred fifty dollars and up for purchases over two hundred thousand dollars.
Closing costs on homes under two hundred thousand dollars are typically eight hundred dollars and up, while closing costs on homes above two hundred thousand dollars are typically eleven hundred fifty dollars and up. If you can afford down payments and closing costs, that’s a good sign you might be ready to buy a home.
(Check out our podcast with Colin McElrea from GMSB where Sean and Colin discuss the lawyer’s role in the home buying process, the lawyer’s fees and more: https://www.youtube.com/watch?v=AsTOJN7bTT8)
4. Credit score has improved.
Poor credit scores lock many renters out of homeownership since they aren’t able to qualify for a mortgage. Late payments will kill your credit score.
(Check out our podcast with Erin Hamilton of Sherwood Mortgage Group where Sean and Erin discuss repercussions of bad credit, strong and weak credit, tips for improving credit, advice for those who have filed for bankruptcy and more: https://www.youtube.com/watch?v=qUM0ZKe9npg).
Having late payments and acquiring a lot of debt cause your credit score to plummet and stay low. Recovering from bad credit can take time. Your credit score can drop significantly after merely missing one payment while taking months to return to where it was. If you have a healthy credit score you’ll get better interest rates and loan terms and find it much easier to get a mortgage.
There you go, there are 4 signs you’re ready to stop renting and buy a home. If that sounds like you, then you should be excited! Before you go out and do anything, first speak with a realtor who will give you some insights. The realtor will tell you you need to first get a pre-approval and hook you up with a good quality lender who will take a look at your financial situation. The lender will determine the price range you can afford, allowing the search to be narrowed into the appropriate price range.
Thanks for watching! We hope you found this useful and remember to Put Sean on Your Lawn!
