Saving money was the biggest reason.
“My friend Mike just bought a house and his mortgage is $300 less than his rent! When I heard that, I was definitely interested.” Jenna said. She currently pays $1,440 a month in rent.
She already saved enough for a 5% down payment.
Jenna tapped into a financial calculator to figure out if she should buy now or wait to save for a bigger down payment. “My dad really wanted me to save enough to put 20% down. But I showed him that it could take me 8 years to save that much money! In that time, I could build up $63,000 in equity or spend $140,000 in rent payments,” Jenna explained.
Student loan debt was an advantage.
Jenna has been conscientiously paying her student loan every month since she graduated in 2019. “My mortgage broker said that because I have been paying consistently, it worked in my favour and boosted my credit score. He also said that I can obviously stay focused and live within a budget,” she said.
Credit history started when she was 18.
Thanks to her mom’s advice, Jenna applied for a credit card when she just turned 18, used it and then paid it off every month. Jenna’s credit score is now in the high 700's.
Mortgage insurance was her friend.
Jenna explained, “Okay, one of the reasons my dad wanted me to save for a 20% down payment was so I would avoid paying mortgage insurance. Maybe I could have put more down, but I didn’t want to deplete my savings. What if something breaks in my new house? Or what if I want to buy a new sofa? So mortgage insurance helped me buy my house with only 5% down.”