One of the biggest decisions you’ll make throughout your lifetime is to decide to stop renting and to become a home owner. It’s essential to surround yourself with a team of pro’s, such as a mortgage, real estate, and financial professional to help you through the stages to home ownership, answer any questions or concerns you may have, and inform you how much you can afford and be pre-approved for.

It’s now is an ideal time for first-time homebuyers to embark upon homeownership because interest rates are low, and their are numerous incentives for new home buyers being offered.

Down payment

A major reason most renters feel they can’t afford to purchase a home is because of the down payments requirements. But did you know that the down payment can come from immediate family? If your parents own their current home, or have enough in their savings account, why not work out a deal with them to pay them back over time, and they can give you the funds required for the down payment? Just like that, your down payment is solved.

Educating and coaching

There’s so much information available for prospective homeowners to access. Whether it be found online, from friends, family members or anyone who’s struggled to purchase their first home. But keep in mind, what you really need is education and coaching as opposed to being bombarded with everyones opinion on how to do it.

Step 1: Speak with a mortgage professional and let them know that you’d like to know how much you’d be pre-approved for. This number is important because when shopping for a home you want to know what you can and cannot afford. The worst would be seeing the home of your dreams, only to find out you cannot afford it.

Step 2: Once pre-approved, meet with a Real Estate agent, inform them of your budget, and start looking,

Lets compare the costs to purchase a home (vs) paying rent. If a renter is currently paying $1,600 per month on rent, with that same payment (excluding taxes) they could afford to buy a $360,000 home*. Now lets assume that real estate values increase by 2% every year for the next five years (even though in our current market we’re seeing much larger increases than 2%/yr). One would have accumulated $30,000 in equity in their home. But, if they continue renting, this $30,000 has generated equity in someone else’s home. Plus, know when you’re renting, you’re paying for someone else’s mortgage, and for them to get ahead.

Have a great day, and feel free to reach out to me if you have any questions.

– D

*based on 5% down, amortized over 25 years at 2.59%, fixed rate term. Rate as of Februar 26th, 2016 and is subject to lender approval