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Why buying is better than renting
Here are some things to consider when you start wondering whether you should stop paying down the landlord's mortgage and take out one of your own instead. What possibilities do you open up for yourself by opting for home ownership? Here are just a few:
- If you're 35 now and just buying your first home, you'll be mortgage free by the time you're 60 and sitting comfortably on a considerable asset. It could mean financial independence as a senior and the opportunity to enjoy your golden years.
- It's highly likely that your investment will appreciate considerably in 25 years. Don't buy now with the intention of making a quick profit. What happened in Ontario during the late '80s may never happen again. Think of home ownership as a sound, long term investment.
- Buying a home is a very effective way of saving regularly for 25 years. Even if you never buy into another retirement savings or investment plan, you're effectively putting money away for the future.
- Over a 30 year, up and down economic period, Ontario housing gave a better return on investment than treasury bills, government bonds, the Toronto Stock Exchange 300 Index or gold. This was the conclusion of a 1991 study by 2 professors from the School of Business Administration at the University of Western Ontario.
- Owning a home of your own means you can set down roots, get to know your community and involve yourself in it. Kids can make friends in the neighbourhood, many of whom will probably go to the same school and be involved in similar recreational groups.
- Discover the pride of home ownership. You can fix up the place to suit your particular needs. Knock out that cupboard under the stairs. Put a darkroom or woodworking shop in your basement. Try those fancy paint finishes, put a mural on the wall, build a deck, create the kitchen you've always dreamed of. They'll be there to enjoy for as long as you want. You'll get at least as much out of the work as you put into it.
- You can have pets in your own home.
- Mortgage insurance that pays off the balance of the principal when a homeowner dies means your family will be left with a home and without debt . . . not high and dry!
- 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.
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 zero per cent 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 (
RRSP Home Buyers Plan
). Be sure to check the information on this website about
affording a home
.
After you have carefully considered all of the aspects of home ownership and are ready to begin
your search, it’s time to contact your REALTOR®. He or she has access to the Multiple Listing service®
REALTOR.ca
, 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, wants and budget. Your REALTOR® will also provide valuable assistance and guidance to you throughout the buying process.
.
This information is provided by the London and St. Thomas Association of REALTORS®.
The information herein is believed to be accurate and timely, but no warranty as such is expressed or implied.
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