Rent or Buy?
Many of those who rent, but are getting ready to buy a home, watch the mortgage interest rates very closely.
A recent study found that 28% of renters are planning to buy a home in the next two years. The study also revealed that more than half of those surveyed would buy a home much sooner if they expected the rates to increase in the next year.
With the TD and Royal Banks ending their 2.99% mortgage deals early, according to a recent article in the Financial Post, it makes one wonder if the rates are set to rise. Concerns about rising household debt levels and global economic uncertainty are seen as the cause of the quick change in policy. When the big banks have higher costs for funding mortgages, they quickly pass on the costs to the consumer.
Interest rates make a huge difference when buying a home and it makes sense to watch them closely if you are thinking of buying a home or refinancing a mortgage. A 2% increase in borrowing money to buy a home can costs thousands of dollars in increased costs, so it is best to shop around to get the best deal available. Even better is to get the help of a mortgage broker who can assist you in finding the best deal. Mortgage brokers are excellent at finding the best deal, since they have access to funding that is almost impossible to find on your own.
In the study, almost 70% of renters stated that they get mortgage information from mortgage brokers with fewer selecting their bank as a source for mortgage information. Over a third of those surveyed want flexibility in their mortgage and payment options as well as getting the lowest rates. Most of renters who are ready to buy have been doing some research and are aware of the buying process, but rely on mortgage brokers for fast and efficient mortgage options and solutions.
When consider buying a home, there are many factors that need to be considered. While many consider how much they have saved for a down payment, it is easy to forget to also look at the size of your emergency fund. While you may have the down payment for a home, do you have extra to cover legal and closing costs, or to cover emergency repairs on roofs or heating? You also need to consider the possibility of a drop in housing prices, depending on the location in which you are going to buy a home. A sudden drop in value of one’s home can quickly offset a 1% savings on a mortgage. If mortgage rates are stable, then save as much as you can for your down payment. However, there are other aspects of owning a home that may make you want to buy sooner than later.
Why buy a home?
In a previous article we outlined some solid reasons for buying a home, which included paying rent to yourself and investing in your own property instead of paying someone else’s mortgage. Own a home is an excellent way to save money, since you pay down your mortgage with every payment, and you increase your net worth as the value of the land increases. There are also many tax benefits and other advantages for home owners. The bottom line is that at the end of 25 years or less you can own your home and no longer have to pay a monthly fee to live there, whereas if you rent for 25 years you will only see rent increases with nothing to show at the end.
Get some help
If you are renting, and want to look at your options to buy a home, it is a good time to contact the Mortgage Brokers at One Stop Mortgage. Getting someone to work hard for you to provide quick answers, solid advice and excellent mortgage rates is so important, particularly in a market where household debt is at historic highs and there are global economic issues. Despite the uncertainty, working with a mortgage broker can give you the answers you need to purchase your home and take advantage of all that has to offer.
Call One Stop Mortgage today at 604-874-8988 or 1-877-874-8988, or email them at firstname.lastname@example.org and get the answers and advice you need before you make one of the most important investments of your life.