The answer to this question really comes down to your life’s goals. Getting a mortgage can be expensive but it will save you money over the years. While renting you have less freedom to live by your own rules but more flexibility if you need to move. So which one is it? To Rent or To Mortgage?
Benefits of Buying Your Own Home
- Your monthly mortgage payments will go towards buying your home as oppose to in a landlord’s pocket
- You can own your home at the end of the mortgage loan and then live rent free
- You can make a profit if the value of your house rises
- You do not need to follow a landlord’s rules – you can have as much pets as you like
- You can freely decorate or landscape without having to seek permission
- You can be asked to move by a landlord if they want to increase the rent or sell the property
Downfalls of a Mortgage
- The upfront cost of a mortgage can leave a big impact on your savings or finances
- Changes in interest rates can impact your mortgage payments
- You have to pay for any repairs
- If you have any changes in your finances moving to a cheaper property can take a long time
- There are financial consequences if you fall behind in your monthly payments on your mortgage – this can also impact your credit rating
- If you fall too behind in your mortgage your house can be repossessed
- Finding a home to rent is usually easier than the process of purchasing
- You could probably rent a bigger home in a nicer area than you could afford to buy
It is usually cheaper to rent in the short term because the rent you pay could be lower than a mortgage payment and the deposit is usually less than the initial cost of buying a home. However mortgage payments can sometimes come to less than paying rent, depending on the property you choose. Buying a home could cost less in the long term.
But Can I Afford a Mortgage
Before you get a mortgage you need to consider the below points:-
- You can get a mortgage loan that will cover the purchase of the house. But you need to find out how much you will qualify for – Private message me for further details.
- Can you afford the monthly mortgage payments based on your current expenses? A definite point you need to consider before you get the mortgage.
- Do you have a deposit? Will you be saving at least a deposit of 5% or 10% of the purchase? Do you have enough in your savings to cover the Legal Fees? In Barbados legal fees work-out to be approximately 5% of your mortgage loan. There are however ways to reduce this figure further. Private message me for further information.
- Have you considered the hidden cost? There are other cost that goes along with getting a mortgage such as Life/Property Insurance, Land Tax, Legal Fees and application fees.
- Have you considered the impact your age has on getting a mortgage? Yes how old you are can impact whether you qualify for a mortgage. Why you may ask? Bankers look at your age to determine the tenor on your mortgage loan.
Getting a mortgage is a big deal!!!
Before you make the decision to do it you should really discuss it with someone knowledgeable in the field.
Message me so we can set up an appointment to discuss further.
Do you want to see a topic you are interested in reading about? Private message me with your ideas and it just might be my next discussion.
If you have any questions please do not hesitate to contact us at support@afbconsultingservices.com