Should You Consider Buying Your First Home?
Perhaps, you’ve been shopping for a home for quite a while when come across a home that you ever dream of: two-story four bedroom bungalow with spacious rooms, big garage and patio. If only you can afford the minimum down payment at stake, makes you ponder whether you’d try to look for ways to get it now or later. As you ponder on this idea, you should know that buying your dream home concerns large transaction that will cost you for a lifetime. Thus, you must thoroughly decide on this matter and consider certain factors along the way.
Things To Consider When Buying Your First Home
The following are some of the things that you need to ponder when making the biggest decision that you’ll be dealing with your entire life.
High-Interest Debt
If you’re carrying high-interest debt, you have to consider whether you can afford purchasing a home. So, if you got an outstanding balance on your credit card, might as well target paying it off before you jump into buying a new home. As time goes by, your credit card can accumulate high interest rates when ignored. Moreover, if you decide to gamble on purchasing a home even with an existing credit card debt, the chances of not complying to your obligation is possible.
Besides, if you fail to pay your mortgage, the bank will be compelled to foreclose your house. Hence, you can’t serve two masters at the same time; considering the growing interest on your credit card debt and the possible dilemma to foreclose your home, you ‘ll be left with both heavy choices. So, either what you choose, both will yield drastic results, causing financial breakdown.
Low Mortgage Rates
Mortgage rates are historically low. In fact, you can get a fixed rate for 5 years for as low as 3% and a variable rate of 2.6% or lower. This will make it easier for you to pay it off faster. So, it’s also a great decision to grab the opportunity of getting a low mortgage rates. This would be feasible for as long as you pay it down as fast as you can. This is because the tendency to increase your mortgage rates is possible over time.
Seller’s Market
Several markets on mortgages throughout Canada are referred as seller’s market. This entails sellers capacity to call the offer. In the competitive markets such as Toronto and Vancouver, the battle in bidding are rampant. Additionally, if you’re willing to do allocate a huge amount of your finances to fulfill your dream home, you might consider weighing your options to shun regrets on the course of your journey.
Strict Mortgage Rules
Even though mortgages have low rates, the more it’s difficult for someone to qualify. This is even made harder due to the stiffer mortgage rules, which is crafted to shun majority of the housing correction. In fact, mortgage amortization was modified to 25 years from its original 40 years. This entails that holding home costs has been increased significantly. Therefore, before you buy your dream home , you must lay out a forecast of your budget with a high payments on your mortgage each month.
Your Home is a Great Long-Term Investment
From a general point of view, a home is considered a good investment. You can actually put it on rent to generate income and to justify it as good debt. Besides, each time you put monthly payments on your mortgage and eventually pay it down, you’re somehow stacking equity and boosting your net worth.
