Are you renting and wondering if it’s time to get out of the world of renting and into the world of homeownership?
Here are 5 Signs It’s Time to Stop Renting and Buy a Home.
1. You’re tired of your living situation.
If you’re constantly unhappy with your rental situation, it may be time to start looking for a place to call your own. Whether you’re tired of your landlord’s rules or you’re simply ready for a change, owning your own home can offer more stability and long-term freedom than renting.
And the fact is, rent keeps rising. As a rule of thumb, a tenant should spend no more than 25-30% of their income on rent. But that isn’t happening anymore. If you are done with paying someone else's mortgage, then you know it’s time to either make a plan or take action.
2. You can afford the costs of a home.
Buying a home requires a certain level of financial stability. Steady employment is important, as well as having adequate savings for a down payment, lawyer's fees, commission, as well as monlthy mortgage payments and interest, insurance, property taxes, and home maintenance going forward.
Let's look at the down payment. First-time home buyers can pay as little as 5% on a down payment. That's around $15,000 for a $300,000 home.
With hard work and dedication to savings, saving up for a down payment around this price is something you can achieve, even if it takes planning and some time.
One worry we hear is that interest rates have risen. But, looking at the numbers, buying a home still makes more sense than renting. Let's do a calculation and put in a higher interest rate just to make a point.
5.34% on a $300,000 home, over 25 years, you'll be paying around $1,780 a month for mortgage payments.
Homes for rent in Sarnia-Lambton are going from anywhere between $2,000 and $4,000+ per month.
The average 2 bedroom apartment in Sarnia-Lambton is well over $1,500 a month, while 3 bedroom apartments are $1,875 a month on average. So, you'll be potentially be spending more money by renting and the payments won't be adding to your net worth.
You'll need to calculate all your monthly income, costs, debts, and savings to see what price range is affordable for you as a home buyer. Luckily, this is what financial lenders will do for you in the form of a pre-approval.
3. You want to build equity.
When you're a homeowner, your mortgage payments are going towards something that is yours - equity in your home. Equity is the market value of your home minus the amount you still owe on your mortgage.
As time goes on and you make mortgage payments, your equity will grow. When you rent, someone else's equity grows. You can even use this equity as collateral for things like home renovations, investment opportunities, or even to help with a down payment on a second property.
4. You want stability & predictability.
Renting gives you flexibility in terms of moving, but it also comes with the risk of your rent increasing or having to move with little notice. Owning a home gives you stability and predictability in your monthly costs. Unlike rent which can legally increase by 1% or 2% each year, your mortgage payment is much more stable for the life of your loan.
5. Your credit score has improved.
If you've been diligently working on improving your credit score, it could be time to reap the rewards. A higher credit score can mean a lower interest rate on your mortgage, which can save you thousands of dollars over the life of your loan. If you're tired of renting and are ready for a place to call your own, now may be the time to buy.
Give Blue Coast Realty a call today. Whether your homeownership goals are in a timeframe of a few months or a few years, our team is ready to help you find a home that fits your budget and needs.
We can help you navigate the home-buying process from start to finish.
Give us a call today at 226-778-0747
