Here are 5 things to consider:
- The vacancy rate for rental accommodations in Brandon is relatively low, which usually means poor selection to choose from, and the rental rates are relatively costly.
- There is an abundance of home inventory currently on the market in Brandon, which allows a buyer more selection, and purchase prices that are more reasonable.
- Mortgage interest rates are currently at an all-time low, which makes your mortgage payments more affordable.
- Canada Mortgage & Housing Corporation (CMHC) premiums are set to increase by approximately 15% on June 1, 2015 for any Mortgage that has less than 10% downpayment.
- If you don’t have a down payment saved up there are options such as using RRSP’s under the First Time Home Buyers Plan and/or gifted down payments from family.
~ It is common for a 2 Bedroom, 1 bathroom apartment to rent for $800/month or more.
~ You can buy a 2 Bedroom , 1 bathroom home (with a basement and a yard) for approximately $150,000. Your mortgage payment with taxes (PIT) would be approximately $775.00 monthly (using 2.69% on a five year fixed rate with 5% down and taxes of $100/month). At the end of the five year term you would have paid $22,107.00 towards the principal on your mortgage. That equity is yours! So why not put some of that monthly expense in your pocket rather than in someone else’s? Then there is the possibility of an increase in value of your home over 5 years. ~ CMHC premiums are added to your mortgage if you have less than 10% down, therefore your mortgage payments will be increased after June 1, 2015. However, if you apply for a mortgage prior to June 1/15 you will still qualify for the current premium regardless of the closing date. See more on CMHC website by clicking on this link. http://www.cmhc-schl.gc.ca/en/corp/nero/nere/2015/2015-04-02-1605.cfm
~ Of course there are other costs involved with owning your own home such as maintenance, repairs and insurance and when buying, you will need approximately 2% of the purchase price for closing costs.
What do you think?......... Is buying your own home a good idea?