Renting - When Is It Finally Time To Buy?
Your home is your castle and great investment towards your future. It is also a large commitment of your time and money over a very large period of your life. We all want to make smart investments with our earnings, but how do you know when it is time to take the plunge and put down a payment on a property?
Let's be honest, renting is often cheaper. After you make your 20% down payment, pay your mortgage, property taxes and maintenance you still need to support your lifestyle. Crunching numbers will give you a good idea of your homes affordability. A balanced budget should have your home cost represent no higher than 33% of your monthly earnings. Owning your own home can be very rewarding, and repairs may feel like upgrades, but they are still very expensive. Home ownership requires you commit your time and money for the future.
Mortgage payments will reflect a substantial part of your life. Your purchase must reflect where you are in your life and compliment your goals. Neighbourhoods, home size and proximity to your work must flatter your long term goals. If you plan to move in the next few years, you need to factor high selling cost (sales commission, land transfer tax, and the risk of short term decline on the market.) If you see children in your future, your condo may not have the room you need. Looking at the big picture will help you decide if this is a good purchase for your future.
It is important to be well research on the real estate market, however a soft market does not mean it is time for you to buy. Never go into a property purchase before you're ready just to save money. Delaying your purchase, means delaying your final ownership, however jumping into a purchase before your ready can be disastrous. Price negotiation may be easier, but homeownership is about making responsible choices. Don't be swayed by the market, it's a plus, not a decision maker. A responsible purchase is your future's best investment.