If you are unsure where you might be living in the near future, then paying rent works to your advantage because you have more flexibility. So, even though rent is considered an expense, it may be worth the expense for many people to be able to pack up and leave relatively easily. However, if you have settled in a particular area and are in search of security, rent may not be the best option for you. Indeed, if you are in search of a more permanent residence, you might want to consider buying a home, which unlike rent, is considered an investment.
Home ownership has many significant benefits over renting, particularly the ability to own and have control over your own residence, while building equity in an important investment. If you are considering buying a home but are worried that you lack the financial ability, please read the report titled, “How to Own a Home Instead of Paying Rent”, found below. It will illuminate six important facts about home buying that can help you move from being a renter to a home owner.
How to Own a Home Instead of Paying Rent
Stop Paying Hundreds of Dollars a Month to Your Landlord
We all have the same dream: to stop renting and own a home instead. However, if you are similar to the typical renter, you might feel stuck in an apartment that never truly feels like your own. Indeed, it is difficult for an apartment to really feel like your own when you are forbidden from customizing the space to suit you. You might even have to consult your landlord before hanging a picture or painting a wall.
Stop Feeling Trapped in Your Rental!
Regardless of how long you have lived in your rented space, or how impossible your financial situation might seem, there are a few little known tips that can help you move from being a renter to a homeowner. By reading the following information, you can better understand how to:
- Save your money for a down payment on a home
- Stop wasting your hard earned money on rent
6 Facts That Can Help You Purchase Your Own Home
Most renters can easily commit to a monthly payment. Indeed, a monthly rental payment is very similar to a monthly mortgage payment. The problem most renters face that often prevents them from becoming homeowners is saving enough money for a down payment. Alternatively, some buyers think that they will not qualify for a mortgage.
Importantly, saving for a down payment and acquiring a mortgage is not as difficult as it is commonly thought. To illuminate this point, consider these six facts:
- A home can be bought with a much smaller down payment than most people realize.
Many local and federal government programs (often referred to as first time home buyers programs) have been developed to assist first time home buyers in their pursuit to enter to housing market. Even if your partner or spouse has owned a home before, provided your name has not previously been registered, you can qualify for these programs. Be sure that your real estate agent is knowledgeable about your options in this regard.
- Your lending agent might be able to assist you with acquiring enough funds for a down payment and closing costs.
Even though you may not have the funds for a down payment, if you do not have debt but do own an asset free and clear (such as a vehicle), you might be able to use this asset to acquire a loan from your lending agent to cover the down payment. They can secure the loan for your down payment against your asset.
- A seller might be willing and able to help you.
If willing, a seller might be able to acquire a second mortgage for you, called a seller take-back. With this type of second mortgage, your lending institution is actually the seller of your home. Instead of paying one lump sum for the home, you would pay the seller of the home monthly payments.
- Without going into debt you might be able to acquire a cash down payment.
You might be able to generate a sizable tax refund for yourself, to be used as a down payment, by borrowing money for certain investments. Although the money borrowed is actually a loan, the amount you pay per month might be small. Importantly, both the money you have invested into a home, and the money in the investment, will become yours.
- Even if you have had trouble with your credit rating, you may still be able to buy a home.
If you are able to save more than the minimum down payment required, or can secure your loan with other equity you have, many lending institutions will not turn your request for a mortgage down. The seller take-back mortgage may also be a viable option for you.
- It is possible, and strongly recommended, to get preapproved for a mortgage prior to house shopping.
Acquiring a mortgage preapproval prior to house shopping does a great deal to reduce your stress. Instead of wondering how much you can afford, with preapproval you will understand your budgetary restrictions perfectly. Furthermore, preapproval is simple to obtain. At no cost, your lending institution can provide you with a written preapproval. This preapproval will come with no obligation and can even be obtained over the telephone. Importantly, a written preapproval is akin to having that much spending power. Being preapproved indicates that you have completed a credit application and have been provided a certificate that guarantees you will receive a mortgage for the amount indicated on the preapproval. Thus, you won’t find a home you love, only to find you cannot afford it.
Further, you should consider dealing with a mortgage specialist. By enlisting the service of a mortgage expert, you can significantly impact the cost and effectiveness of the mortgage you acquire. For example, a mortgage specialist can speed along the process, which can avoid any costly delays. Typically, it should be free to ask questions of any mortgage specialist.
As a renter wanting to become a homeowner, there are many issues that you must become aware of. Do not waste money on rent because you are under the misguided assumption that you have no other option. Please feel free to contact me to discuss your specific needs and devise an appropriate plan of action. The conversation is free to you!
Importantly, although home ownership has many benefits, please don’t feel obligated to purchase because of the information provided here. Even if now is not the right time for you to purchase, by learning about and exploring your options now, you will be more prepared when the time is right for you to buy. Maureen and I wish you the best but if we can help you now, don’t hesitate to contact us. It’s a simple and easy call to make, with no obligation.
Doug Blackstock – Doug@DougBlackstock.com
On Cell: 613-328-1653 Toll Free: 1-800-862-4443
Maureen Blackstock – Maureen@royallepage.ca
On Cell: 613-532-3427 Toll Free: 1-800-862-4443