Should you buy a house now or save more to cover down payment
Purchasing a new home is most definitely your goal – or an ideal you’re thinking of prior to reading this article. And you’re hesitant because home ownership is the single biggest decision most of us will ever make.
Take your time if you can. A home purchase should never be rushed or pressured. Of course, there may be times when the situation dictates your timing. The best course of action then is to find the best mortgage guide from Newcastle Permanent Building Society or other leading mortgage providers that can help you finance your new home. Reasons like expanding family, baby on the way, work relocation – are all valid reasons to find a home in a hurry.
Perhaps you’re buying at a buyer’s market where prices are in your favour. Even so, you need to plan and ask questions. So, should you wait till you have saved enough to cover a down payment for your new home, or find analternativesolution to finance your down payment?
Here are some of your options, see which can fit you.
Borrowing for your down payment to purchase home fast. Borrowing your down payment canlet you stop paying rent much faster and live in your home sooner.Less money spent into rental means you can pay off your mortgage instead of someone else’s.
Moreover, you can buy at a good market before house prices increase beyond what you can afford. This way, you can take advantage of the housing slump, plus you can possibly afford a better house for your money. You will be able to start paying off your home earlier. And it can lead to large savings in the long run.
Of course, there are also disadvantages to borrowing for your down payment, you may likely pay more interest based on the kind of loan you will get – some providers givea high-interest rate. Plus, you may be atrisk of taking on more debt than you can pay back, leading to more unwanted cost.
Also, if you are forced to sell at a loss, you may be stuck with paying back your home’s high-interest loan when you may not have the means.
Holding off buying and saving for down payment. This option will obviously help you avoid paying a high-interest loan and you won’t have to worry about the danger of trying to pay back the loan in the eventyou’re forced to sell the home in a hurry and cannot recover your costs.
But while you will save the costs of paying mortgage insurance, you will have to wait a whileto own your home – that and you still have to pay more rent.The rent you will be paying could go towards paying down your mortgage, and helping you own your home faster.
There is the risk that your savings can diminish as you will need to pay your other expenses. Rental homes still need to be set up.
Based on the real estate market and the banking situation, house prices, as well as interest rates,canrise by the time your down-payment is ready.
That’s it. Whatever you decide, note that you need to plan and decide well. Moreover, consider talking to a consultant or visiting the best mortgage guide from Newcastle Permanent Building Society to learn more about your options.