real estate

Equity in your Home: Is it Wise to use it?

real estate

There has been a change in the financial situation in our generation with respect to our earlier generation. About 30 years ago, our parents tried, and were mostly successful, in paying off their mortgages by the time they turned 40. After attaining this financial freedom, they started enjoying their lives by spending money in areas of their choice and interest. It was possible for them to be debt free so early in their life because at that time, the average mortgage value of a house was about two to three times of a person’s annual income.

 

The strategy adopted by our parents may not be suitable for us because of the simple reason that the average mortgage value of a house has now become approximately six to nine times of a person’s annual earning. So it is extremely difficult, if not impossible, for an average Canadian to become debt free around their middle age. Waiting to enjoy life till all the loans are paid off may not be a wise decision anymore because you may be able to reach that stage only when you are too old to enjoy things.

 

A solution to this issue can be to borrow against your existing equityafter you have been able to pay off most of your debts. By doing so, you will be able to invest and spend money in areas of your liking with a comparatively low debt against your name. However, borrowing extra money to enjoy life in the prime should be done only in case it does not put you in additional financial stress. In some situations, it is wise to sacrifice in the house size, thus reducing the mortgage amount, and using the spare money in something you like.

 

Considering Buying A New Home

real estate

home-buyingHome ownership is a goal that most people have. But can you be sure that it is the right decision for you?

How Are Your Finances?

Your finances are an important factor in buying a new home. You need to be certain your finances can withstand a mortgage payment, as well as maintenance, repairs and utilities.

Are You Planning To Stay In The Area?

If you are not intending to remain in the region in which you are considering purchasing a house, it could be better to simply rent. Purchasing a home is a big commitment and you may end up losing money if you may be moving within the next few years.

What Does The Market Look Like?

When purchasing a home the market is an important factor. This will assure you get the best value for your money and that you get the best interest rate possible. If the market is not in your favor, you may try waiting a short while and it will probably change soon.

Before making the decision to purchase a home, you have to ensure you are prepared. Use the information from this article to assure you make the best decision for you.