ADVANTAGES OF BUYING YOUR HOME
• Control over housing expenses. By selecting a fixed-rate mortgage over a variable mortgage rate, the homeowner has assurance that housing costs will not increase in the next 5-year mortgage period. • You build equity. Some of each monthly mortgage payment goes toward the mortgage’s interest. Other portions may go toward property taxes to the city. The remainder pays down the mortgage principal. Every dollar put toward your mortgage’s principal represents a dollar of equity (the difference between the current fair market value of a property and the amount of debt owed against it). Further, the property should appreciate in value each year, adding to equity (what the house could be sold for versus what is owed on it). • Improvements increase your home’s value. A homeowner can also increase a home’s value through home improvements, thus both making your home more comfortable and enjoyable while growing its mortgage- to-value (LTV) ratio. For instance, adding a bathroom or finishing a basement substantially increases the property’s functionality and curb appeal, while potentially boosting its value. • Current mortgage rates are slowly dropping. Interest rates rise and fall through the years. Several years ago, interest rates were really low, and it was less expensive to obtain a mortgage. During 2021-2023 they rose again and made it really difficult for variable rate mortgages and for those renewing from lower rates.
5
Powered by FlippingBook