What are the benefits of home ownership?
So, you have decided to buy a new home – congratulations! This is a great step towards ensuring your future.
Main financial benefits of home ownership
There are some amazing benefits of home ownership that we think you should be aware of right out of the gate:
- If you are looking for savings, one of the best ways to do so is by purchasing a residence of your own.
- Investing in a home you own stands to build your real equity instead of renting where you see none or perhaps even lose money each month.
- Your equity in your home can be used as security for other loans.
- The return on investment is substantial – in fact, the average price of a house for sale on the Canadian real estate market has increased every year since 1998.
- While other investments can prove volatile, investing in real estate is a solid use of your hard earned money
Home ownership, is it a good investment?
When it comes to home buying, your new place should be a lot more than just about numbers and metrics. It’s also about how you feel about coming home every night after a long day of work or study. And that feeling can only come from needing your own space to relax in to truly help calm you down after an otherwise exhausting day! Another important thing to consider is if you have equity in your own home, it can increase the likelihood of securing better deals on insurance as well as making loans simpler and cheaper.
Now, as excited as you are to get started, you probably have some questions! Let us take you through some of the most important things to know when it comes to homeownership to ensure your experience is as smooth as possible – and provides the best possible outcome for you!
Homeownership and what it means to you
While it is important to know what you can afford, planning your new home beyond numbers will result in a lot more benefits. One of the most profound advantages of owning a home is the ability to live comfortably and relax knowing that at any time you want – you are free to do whatever you see fit or with whom you wish. All doors are open! Everything from ‘bringing in a pet’ to ‘hosting an amazing pool party’ is just one call away as long as you have your own home to call your own!
Things to Consider while taking home ownership
- Mortgage
- How much do I qualify for and what can I afford?
Let’s discuss more of the consideration points before buying your own home amd start enjoying the benefits of home ownership.
Mortgage:
What exactly is a mortgage? To keep it simple, a mortgage is a loan that is specific to properties and homes. This type of loan uses the home or land you purchase as security in the event the loan cannot be paid. Mortgages are registered as legal documents and can be obtained through a variety of sources (or lenders) including banks, credit unions and alternative lenders or through the use of a mortgage broker!
There are a few terms related to mortgages that are important to know:
Principle | The principal is the amount of the loan that is actually borrowed. |
Interest Rates | As with any loans (credit cards, lines of credit, etc) interest will be incurred. This is the amount that the lender charges for the privilege of funds borrowed. The amount of your interest payment will depend on the interest rates, which vary depending on terms and conditions of the mortgage and the borrower’s credit history. |
Mortgage Payments | These can occur monthly, semi-monthly (twice a month), bi-weekly (every other week), accelerated bi-weekly or weekly and are made to the lender. These payments encompass both payments to the principal amount borrowed, as well as interest charges. |
Amortization Period | This is the number of years it will take to repay the entire mortgage in full and is determined when you are approved. A longer amortization period will result in lower payments but more interest overall as it will take longer to pay off. The typical range is 15 to 30 years. |
Term | Term is the length of time that a mortgage agreement exists between you and the lender. Rates and payments vary with the length of the term. The most common term is a 5-year, but they can be anywhere from 1 to 10 years. Generally a longer term will come at a higher rate due to the added security. A “Fixed Mortgage” means you are locked in at the interest rate agreed for a longer length of time.A “Variable Mortgage” features an interest rate that is adjusted periodically to reflect market conditions. |
Maturity Date | The maturity date marks the end of the term. At this time, you can repay the balance of the principle or renegotiate the mortgage at the current rates. Note: If you choose to repay or renegotiate the mortgage before the term is up, penalties may be charged. |
How much do I qualify for and what can I afford ?
When buying a home you’ll want to make sure you have enough room in your budget to make the monthly mortgage payments. One factor that could play an important role in determining whether or not you can afford to buy a home is knowing how much you qualify for when it comes to the mortgage loan that’s going to be used for purchasing property. Determining what amount of money the bank will give you for purchasing a home is based on two ratios called gross debt servicing and total debt servicing. Let us explain what this all means and how it can help guide you during your home-buying journey…
What truly matters when buying a home is ascertaining your needs and financial situation. Once you’ve done that, you can then turn your attention to learning more about what type of home is best for your lifestyle – and maybe, even your pets.
How to get started as a home buyer?
Consult with the team of professionals powered by Dominion Lending Centres, Concept One Financial Group is a team of mortgage professionals work for our customers – not the lenders – to ensure our customers receive the best rates and products available in today’s marketplace. Whether they are looking to purchase their very first homes or upgrade to a new home, mortgage renewal, refinance for equity take out, purchase investment properties.
Our lending solutions are catered for the conventional, self-employed, new immigrant, and non-resident; residential and commercial mortgages; Insurable and uninsured. As is customary in the field of Canadian mortgages, we deal with big banks, smaller lending institutions and private lenders. Each client’s financial needs differ, which is why we work with a variety of lenders.
Source: Benefits of Home Ownership – Dominion Lending Centres