That is the question! When a person reaches a certain level of stability that comes along with being in a career for a time, a person must ask themselves whether it is the right time to purchase a home.
Often, the decision to buy only comes after marriage and children, when there is a need for greater space. Paying more in rent can often feel like an exercise in futility, a proverbial hamster wheel. Where does it get you at the end of the day? Which brings me to…
- Buying builds equity
To get right down to the basics: home equity is the difference between the market value and the unpaid mortgage balance on your home (Wikipedia:Equity).
The first couple years of your mortgage is paying off the interest, which is why you want to get the lowest interest rate possible. Any time after that you are paying down your mortgage and building equity (decreasing the difference between your unpaid mortgage balance and the market value of your home).
We like to look at owning our home as having a forced savings account. We put money into that savings account via our mortgage payment and upgrading our home to increase its value for when we sell.
- Modifications
Have you ever wanted to paint that awfully bland rental unit but needed to ask permission or it was altogether not allowed? Do you have a knack for carpentry or are extremely handy and have plenty of ideas for built in shelves or knocking down walls for maximizing a space?
Buying your own home can and will satisfy and DIY desires you may have (sometimes whether you like it or not).
- Income potential
If you are approved for a nice hefty mortgage but don’t need all the space you can afford, then perhaps an income suite would suit your lifestyle.
Have someone else pay a portion of your mortgage and help you build equity. Free up some of your income from paying a big mortgage and put it towards savings, vacations or maybe a new car.
There are some instances where it might not be a good time to purchase a home. If you are in the middle of a vagabond phase or have been bitten by the travel bug, then you are not likely to be saving money for a down payment. If you’re under or unemployed, the likelihood of getting a mortgage is low.
If you are considering buying a home, then consulting with one of Barrie and Simcoe County’s Top Realtor’s can be a great stepping off point. John Weber is full of knowledge from years in the service industry and five successful years in Real Estate.
Definition For The Week: Agreement of Purchase of Sale
This is the document that is used to state the Buyer’s desire to purchase the property, and to negotiate the terms of sale. It is commonly referred to as an “Offer“. This document also allows the Buyer a chance to outline in detail all of the conditions they wish to be placed in their Offer to buy the Seller’s property.
Some common examples of a Buyer’s conditions include:
- arranging financing (a mortgage) for the property to be purchased
- completing a home inspection
- ensuring that the sale of their current home is completed before purchasing a new one.
After the Offer is prepared and signed by the Buyer, it is presented to the Seller for acceptance. The Seller, in turn, may want to make changes to the Offer for the Buyer to consider. This process can continue back and forth several times in an effort to reach an agreement.
