Owning a home definitely has its advantages. With this primer on the benefits and joys of home ownership, you’ll learn tips and incentives to help you get your foot on the first rung of the property ladder. Two out of three Canadian families own a house – that’s one of the highest rates of home ownership in the world. And for good reason. Real estate is a great investment. And with increasing housing prices, it’s all the more important for first-time buyers to get a foot on the first rung of the property ladder.
Financial advantages of homeownership:
- Homeownership is the single largest source of savings for Canadian households.
- Your payments build equity (as opposed to renting, where your money goes to the building owner).
- Unlike other investments that can be volatile, when you buy a home the increase in its value is relatively steady. The average price of a house for sale on the Canadian real estate market has increased every year since 1998.
- The return on investment for a house can be substantial. In 2004, the average house price in Canada rose by 9% in just one year. It also experienced a 27% increase over four years.
- Homeowners can use the equity in their homes as security for other loans.
- Buying a home and building equity is the first step on the property ladder. It gets you into the housing market, keeps you in touch with increasing house prices, and puts you in a good position to trade up to bigger and better homes as your circumstances allow.
Other advantages of owning:
- Pride of ownership. When you own, you have the freedom to renovate and decorate as you please.
- Family and community. Homes can strengthen ties to your family and members of your community. More than basic shelter, homes can be a legacy passed on from one generation to the next.
Closing costs are the legal and administrative fees and disbursements associated with buying your home. These costs are in addition to the purchase price of the home. They can vary widely depending on:
- The property being purchased
- Services required
- Applicable insurances
- Closing dates affecting interest adjustments
- The balances of any prepaid expenses