colours? Are you confident enough to choose a neighbourhood where you believe home values will continue to appreciate and that will serve your needs (i.e., proximity to schools, shopping, recreation, etc.)? Are you ready to devote time and attention to maintaining a home (i.e., leaf-raking, grass-cutting, appliance maintenance and repair, etc.)? Taking care of your most significant investment can be gratifying, but only if you’re ready.
ADVANTAGES OF BUYING YOUR HOME
Control over housing expenses. By selecting a fixed-rate mortgage, the homeowner assures that the housing cost will not increase for the next 5 years. Mortgages are renewed after 5 years at the current rate of interest. You build equity. Some of each monthly mortgage payment goes toward the loan’s interest. Other portions may go toward property taxes to the city. The remainder pays down the loan principal. Every dollar put toward your loan’s principal represents a dollar of equity and actual property ownership. Further, the property should appreciate each year, adding to equity (what the house could be sold for versus what is owed). Improvements increase your home’s value. A homeowner can also increase a home’s value through home improvements, thus making it more comfortable and enjoyable while growing its loan-to-value (LTV) ratio. For instance, adding a bathroom or finishing a basement substantially increases the property’s functionality and appeal, potentially boosting its value. Tax advantages of home ownership. There are significant tax benefits associated with buying a house, both at the time of purchase and for the duration of time you own the home: Current mortgage rates are relatively low. Interest rates vary through the years. Several years ago, interest rates were higher,
18
Powered by FlippingBook