For most people, taking out a mortgage is the biggest financial commitment they will ever make. Here are some facts to keep in mind when considering buying a home as opposed to renting:
- If you are aged 35 right now and buying your first home, you will likely be mortgage-free when you are 60 and sitting comfortably on a considerable asset.
- It’s highly likely your investment will appreciate considerably in 25 years. It’s important, however, not to buy with the intention of making a quick fortune; think of home buying as a long-term investment.
- Buying a home is a very effective way of saving regularly over many years. Even if you never buy into another retirement or investment plan, you are effectively putting money away for the future.
- Owning a home of your own means you and your family can set down roots, get to know your community and involve yourselves in it.
- As your family grows and moves to homes of their own, you will have the option of earning extra income by renting out spare rooms or floors, if local bylaws allow.
- If you plan to borrow money from a bank or other financial institution, owning your own home is a definite plus when it comes time to negotiate.
- You may not need as much money as you think to get into the home market. Qualified buyers can buy a house with as little as 5% down through the Canada Mortgage and Housing Corporation’s (CMHC) mortgage insurance scheme. You may also be able to use RRSP funds as part of your down payment.
- With many kinds of investments, you have to pay a capital gains tax on profit you make. If your home is your principal residence, this tax does not apply.
After you have considered all aspects of home ownership and are ready to begin your search, it’s time to contact your REALTOR®. They have access to the Multiple Listing Service® (MLS®), a co-operative marketing system through which properties are bought and sold. Using the MLS®, your Realtor can prepare a customized list of properties for sale that best meet your needs and budget.
*Content shared from VREB