You’re standing at a crossroads in your life. Should you rent, or should you buy? It’s a big decision, with a lot of factors to consider. You ask around and quickly find different opinions. A relative suggests buying, a friend at work suggests renting, and Google is suggesting 16 million search results.
“What’s the answer?!”
The short answer is: it depends.
When it comes to buying vs. renting, there are many factors you need to consider before making a decision. Ultimately it comes down to your situation, goals, and budgeting considerations.
While there are great reasons to buy a home, there are also great reasons to rent. Because your personal situation is, personal, we’ve outlined three questions you should ask yourself to help you make the decision.
How long do you plan to live in the same place?
Do you see yourself living here for at least 5–7 years? If not, it makes sense to rent. For young professionals who need mobility to pursue professional opportunities, you will benefit from the flexibility of renting and the added savings of avoiding closing costs.
Typical closing costs include legal fees, commissions, inspections, and appraisals. If you’re selling after a couple of years, it is unlikely that you will recoup your closing costs.
If you’re settled and value stability, then owning a home will be a better option for you.
How do you want to build equity?
There are many different ways to build equity. You can invest into the real estate market or you can invest into the equities market. For many people, homeownership acts as an enforced savings plan.
With every monthly mortgage payment, a homeowner builds wealth through equity appreciation. It’s a long-term strategy. And it’s certainly better than no strategy.
While renting can be more affordable and more money could be made investing into other equities, the question you have to ask yourself is: do you have the discipline to create and implement an alternative investment strategy? If you have the discipline and initiative– great! If not, home ownership is a sound long-term investment.
Can you afford to buy?
If you have very little savings or a lot of debt, then home ownership might be out of the picture for now. But if you have some savings, access to a modest sum for a down payment or both, and you’re confident you’ll be staying in your new home for more than five years, then we think homeownership is for you.
The next steps
Let’s say you want to buy a home. You value stability and you see yourself living in the same place for more than five years. You’ve even started to save money for a down payment– awesome! So, what’s the next step? Shopping for a mortgage.
At MortgagesMadeEasy.com, we help you get ready to buy your first home. Our brokers are here to show you the best mortgage options. While a typical bank only gives you their rates, we have access to several mortgage options from multiple lenders. Many of our clients are first-time home buyers, so we understand that you have lots of questions and we’re excited to help!
Let us walk you through the process and explain what kind of documentation you will need to get approved for your mortgage. Call us at 613-563-3447 or use our contact form.