Advice to Hesitant Buyers that are Currently Renting- When is a good time to buy?

The ongoing lowering of mortgage rates and house prices would suggest to positively sway prospective home buyers into home ownership as for the last several years we have heard the grumbling feedback of how there is no affordable housing in Estevan whether it is rental or home ownership. But lower rates and lower prices have not yet significantly enticed more buyers into the market and this is evident in current showings throughout 2015 so far around Estevan. Based on the saying "what goes up must go down", the opposite is also true, which means prices are lower than ever and mortgage rates are lower than ever so it is only a matter of time that both of these items will start to rise. If you wait too long, the compounding effect of a mortgage rate increase of a percent or two and a (slower than what we are use to) incline in house prices in Estevan means the chance of you being approved for your desirable and suitable home will become less and less likely. Which means the dream of home ownership will have you back at square one with not being able to save for a down payment as your money is going towards your rent. Of course everyones situation is unique but lets picture this for the average long term citizen of Estevan and area, what situation would you rather be in below in 25 years from now?

#1. 25 years of paying $1,500 rent a month and having nothing tangible to show for it in year 2040? (Don't forget you have to continue to pay rent still)


#2. 25 years of paying a $1,750 mortgage a month off on a $300,000 home and receiving debt free home ownership

Heres a hint: One of these options leaves you with a $300,000 asset to your name ($300,000 is conservatively not counting inflation of money in general or appreciation of the house price) and that is all for paying just $250/month extra into a mortgage rather than pay rent. 

Now for anyone that wants to stay hesitant and dream of house prices to go to zero or for mortgage rates to go to zero, you can continue to pay rent (essentially forever) and that is fine also. Some peoples situations in the short term makes sense to do that, however if you want to talk me about getting out of the rental cycle and to start paying off your own mortgage instead of somebody elses I am only a call away!

Shane Ross

Century 21 Border Real Estate


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