We have been living in a rented home since 10 years. Now, me and my family are planning to buy a home. We can’t manage to buy a home with our savings alone. We didn’t know any other ways through which we could pay the funds slowly. I discussed this with my friends and he suggested me to take up a mortgage
( http://www.mortgagesmortgages.ca/). We are little bit confused whether to take up a mortgage or not because we are worried about the monthly payments. Need suggestions regarding the matter. Is it risky to take a mortgage? Or, what else can I do?
No need to worry about paying a mortgage as long as you keep your purchase at an appropriate level. You’re already paying rent, so you are accustomed to making a monthly payment.
I always recommend not spending more than 25% of your take home pay on your monthly mortgage payment. Keep it to 15 year term with a fixed interest rate and at least 10% down. These “limitations” on the size of the house you buy will help to keep the amount of your purchase in line with your income. Many of my coaching clients that are in financial trouble often bought too much house for their income! Don’t let the historically low rates tempt you to over purchase. And don’t let the lender or real estate agent set your spending limit! Use the above parameters to set the limit and then stick to it.
Remember to set aside money for repairs as well. The landlord is still responsible for the repairs. The problem is you are the landlord!
If you keep the mortgage manageable and factor in repair costs you should do fine and you do get some return on your money (sometimes) when you sell unlike with renting.
For most people, investing in a home is a great idea, but that doesn’t mean you should rush out and buy one the moment you have enough for a down payment. Staying in a rental unit for now can give you a financial edge in the long run.
So, before taking a mortgage, ask yourself some questions:
- How long do you plan to stay?
- What is cheaper?
- What kind of mortgage would you be able to get?
Find more info in this article https://www.mycheckweb.com/mortgage-vs-rent/