Is it better to rent or save for a down payment on your home?
Is it better to save towards a down payment on a home or to rent a home? While the easy answer is that a home you own is equity, there are many factors that go into such an important decision.
Rent or Buy?First, if you have been looking into debt consolidation or credit counselling, this may not be your time to spend everything you have on a down payment toward a home. When considering financial security, thinking about your debts as well as your assets is an important start. Using all available money may leave you short for other emergency expenses. As you consider whether to rent or buy a home, ask yourself:
- Do I have good job security?
- Can I save up the maximum amount for a down payment?
- Can I afford the monthly mortgage payments?
- Will I still have enough left over for retirement savings excluding the equity I build in owning my home.
- Is this the lifestyle I want - weekends cleaning and maintaining a property?
How to Save For a Down Payment on a Home
If you are able to confidently answer the questions above affirmatively then you can take advantage of a few tips to help you save for that down payment. Our money management and saving tips can reduce the stress you may feel if you already have a number of debts.
- Prioritize what you spend your money on
- Pay off credit card debt first
- Save more when you earn more - if you get a raise or unexpected windfall, put it towards your savings
- Find cheaper alternatives to expensive hobbies - for instance instead of buying books, get a library card, etc.
- Look for any first time home buyers rebates or programs that may help you with your down payment
- Do not dip into your emergency savings - save money on top of that emergency fund for your down payment
- Use any tax-free savings plans that may be available to you through your bank or government
If you are feeling overwhelmed by your options or need some solid advice regarding your specific situation, please do not hesitate to call the D. & A. MacLeod Company Ltd. today. We have offices across Eastern Ontario and offer everything from debt consolidation services in Ottawa to credit counselling in Kingston. Call our Licensed Insolvency Trustees today f debt help in your area.