If you’re currently renting your home, you may have thought about whether it makes sense to buy instead. Home ownership is a key milestone and one that you may be ready for. Current mortgage rates remain quite low, so this could be a good time to buy a home.
However, the question of whether to buy a home or to continue to rent is a complex one. The answer is different for each person depending on their financial situation. How do you know if you’re ready to buy a home?
Understanding more about your financial situation can help you decide if purchasing a property makes sense for you.
Consider Using your Rent to Buy a Home
The amount that you spend each month on rent could be better spent by putting it towards mortgage payments instead. After all, then you’ll be paying off your own mortgage instead of someone else’s. Plus, if property values increase, you will benefit from the rise.
Mortgage Payments May be Similar to Rent
Depending on what you’re currently spending on rent and the size of your down payment, you might find that monthly mortgage payments could be similar to what you’re currently paying each month in rent right now.
To figure out if this is the case, you’ll want to estimate mortgage payments and then compare this amount to how much you spend on rent. You might find that the two numbers are quite similar.
Of course, there are other factors to keep in mind as well. When you own your home, you’re responsible for paying for insurance, property taxes, utilities, property maintenance, and more. That said, you also have the freedom to do what you want when you want if you’re the owner.
It All Comes Down to Your Budget
Whether or not you should buy a home depends on your budget and your overall financial situation. As mentioned, the size of your down payment matters. If you’re able to put more down, you’ll be able to get a smaller mortgage. If you don’t have a large enough down payment right now, it might be time to adjust your budget so you can increase the amount you save each month.
You’ll need to consider more than just mortgage interest rates and monthly payments when you buy a home. This is a long-term financial commitment, so you’ll want to make sure you have a solid budget that you’re able to stick with and that makes it possible to afford your monthly expenses.
It’s also important to put some money aside for emergencies because life is unpredictable. When you own your own home, you’re the one responsible if an appliance breaks or if maintenance needs to be done. So, it’s a good idea to keep some money to pay for such unexpected costs.
Start by Building Equity for The Future
Buying a home is a great way to build equity. Rather than spending money on rent each month, you could be paying off a mortgage and eventually own your home outright. This will give you a lot of stability and options in the future.
The team at Axiom Mortgage Solutions can help you understand how much it may cost you to buy a home and get the right mortgage for you at the best rate. For instance, you might be able to lower your monthly mortgage payments by getting a loan with a lower interest rate. We can help you do that. This can help make the purchase more affordable for you.
For more information, or to book an appointment, call our Windsor, Ontario office at 519-735-1440 or our Leamington, Ontario office at 519-326-4978. You can also reach us via our online contact form.