First Time Home Buyer?
Buying a home is a huge step, and for a lot of first time buyers it comes with a lot of fears that range anywhere from the rational to irrational. So you’ve spent weeks searching, planning, thinking, arguing with yourself or your spouse to pick the perfect home but you’re still plagued with insecurities and fears about taking this step. You feel like you’re ready, and you’re just overthinking it at this point.
Pros and Possible Problems of Ontario Home Ownership
A time tested way to know if you’re making the right decision is with a pro/con list. For every pro there’s usually a corresponding con, and laying them all out in front of you you’ll be able to see which pros you’d love and which cons you’d love to contend with.
Pros:
-Owning your home is cheaper than renting over the long run
-All the money spent in your own home is on your own property.
-You’ve got the freedom to make changed wherever and whenever you want.
Possible Problems:
-There’s more financial risk in owning your own home.
-It’s all your money that you’re spending if something goes wrong and needs a repair.
-Renovations “take time and more money than you expect.”
None of these cons are deal breakers, and these are just surface level pros and cons, probably the things that led you to thinking about buying a house in the first place right? These aren’t actually problems with owning your home, they’re possibilities because:
-With great risk comes great rewards. Owning your own home can be a great investment. A smartly made mortgage contract can free you up financially in ways you had previously only dreamt of. Owning a home means building equity, and equity is your friend.
Owning a home builds your equity instead of someone else’s. When you rent you’re helping someone else build assets, when you own you’re building your own assets.
If you don’t like a specific paint color then you don’t have to ask anyone but yourself if you can change it. The power to customize your living space to your liking is not something to be taken lightly.
Being a homeowner instead of a renter creates a much greater sense of stability for you and your family. Most leases are a year to year agreement, so at least once a year you’ll be faced with the prospect of moving house and changing your circumstances. When you own, you don’t have to move—ever if you don’t want to!
Things to Expect from your mortgage:
-You’ll need a lump sum for a down payment, if you’re a first time buyer the Canadian government outlined a set of minimums that’s handy to keep in mind:
$500,000 or less – 5% of the price
$500,000 to $999,999 – 5% of the $500,000 and 10% of the price above that
$1million or more – 20% of the purchase price
These are just the mandated minimums, and it’s always advisable to put down more than that. Especially for us in Ontario.
-Your mortgage payment per month won’t just be the primary+interest payment, it will also include taxes, home insurance, and if your down payment is less than 20% of the cost of your home then mortgage insurance premiums will be tacked onto your monthly payment as well. But in reality, this is a few extra dollars a month and not actually a big deal. It all depends on you and your circumstances which is going to work out the best.
Still looking for a con?
-You might get too financially stable, too happy with your surroundings, too happy with your community. In such cases the only real solution is to take a vacation and become too happy somewhere else for a while.
Owning your own home is undoubtedly the way to go, you’ve felt this in your gut for a long time and now it’s time to take the plunge and grow your equity, as a person, as a family, it’s time to grow your life from your new home.