Buying versus renting
At some point in their lives, most Canadians have probably asked themselves whether it is better to buy
or rent a home. And purchasing a home is one of the biggest decisions most
people ever make.
Ultimately,
the decision is a personal choice, but it helps to look at the pros and cons of
buying to determine whether home ownership is right for you.
Some advantages of buying a home
·
Owning a home is generally considered to be a
sound, long-term investment that can
provide satisfaction and security for you and your family.
·
Each month when you make your mortgage payment, you
are building equity in your home. Equity is the portion of the property that
you actually build through your monthly payment versus the portion that you
still owe the lender.
·
At the beginning of your mortgage, more of your
payments go toward paying off the interest and less toward paying off the
principal. But the longer you stay in your home and the more mortgage payments
you make, the more principal you pay off and the more equity you accumulate.
·
Most mortgages also offer you the option of making
additional monthly or annual payments to reduce your principal faster. Some prepayment
privileges, for instance, enable you to pay up to 20% of the principal per
calendar year. This will also help reduce
your amortization period (the length of your mortgage), which, in turn,
saves you money.
·
There is also a tax advantage. If your home is your principal residence, any profit
you make when you sell it is tax-free. A home can appreciate – or increase in
value – as time passes, building more equity. As you build up equity, it’s
usually easier to upgrade to a more expensive home in the future thanks to the
profit you’ll make when selling your current home.
As an
owner, you can also decorate and improve your home any way you like. Ownership
tends to give you a sense of pride and can offer you and your family stronger
ties to the community.
If you
do decide that home ownership is right for you, it’s important to choose a home
you can afford. That is where a pre-approval
will be beneficial to you as it allows you to understand your buying power;
everyone has a budget and it is important to know this especially during
negotiations.
Spring market season is
just around the corner, now may be an ideal time to contact me to discuss your
options… Let me help you enter into home ownership for the first time!
Call me today… Can you afford to wait?
