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Buying versus Renting
With today's interest rates, mortgage payments are often less
than monthly rent payments, making home ownership more attractive than
ever. Instead of using your hard-earned money to pay the
landlord's mortgage, you can use the money to buy a home of your own.
Buying a home make sound financial sense and the benefits extend much
farther. Here are some facts for you to consider when weighing
whether buying is better than renting.
- If you are 35 now and just buying your first home,
you will be mortgage-free when you are 60 and sitting comfortably on a
considerable asset.
- It is highly likely that your investment will
appreciate considerably over the 25 year term of the mortgage.
Don't buy with the intention of making a quick fortune. Think of
a home as a long-term investment.
- Buying a home is a very effective way of saving
regularly for 25 years. If you were to never invest in another
retirement plan, you are effectively putting money away for the future
when you buy a home.
- Owning a home lets you set down roots, get involved
in your community and develop friendships for you and your kids, many
that will last for years.
- Discover the pride of ownership when you make a
house your home. You can enjoy the touches you put into your
home for as long as you want, and then you can change them again.
- Mortgage insurance that pays off the balance of the
principal when a homeowner dies means your family would be left with
the home - and without the debt.
- Owning your own home is a definite plus when it
comes to negotiating with your financial institution on borrowing
money for other purchases.
- If you pay $750 a month in rent and never face an
increase, after 25 years you will have paid $225,000 - and have
nothing to show for it.
- You may not need as much money as you think to get
into the housing market. Qualified buyers can buy a home with as
little as 5% down payment through the CMHC mortgage insurance plan.
- Many kinds of investments require you to pay
Capital Gains on the money you make. You don't have to pay that
tax when the value of your principal residence goes up. This
means you keep the money your investment earns.
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