*** The author of this blog, Ben Officer, is a licensed REALTOR® in the province of Alberta. The opinions expressed within this blog are those of the author and are simply that, opinions. The views expressed in this blog are not intended to advise you, as your needs may differ depending on your particular situation. The information provided in this blog is not guaranteed to be accurate and is subject to change at any time. For legal advice/information, please consult a lawyer. For mortgage advice/information, please contact a licensed Mortgage Associate. For tax advice/information, please consult an accountant. For investment advice/information, please contact a financial advisor. *** Blog Disclaimer - The information contained within this blog and posted by the author is believed to be true but cannot be guaranteed to be so. The author of this blog takes absolutely no responsibility for the comments posted by third parties on this blog.
| Monday, January 26, 2009 5 Reasons to Buy a Homeby Ben Officer on Mon, Jan, 26, 2009 11:39 AM
If you're like most first-time home buyers, you've probably listened to friends', family's and coworkers' advice, many of whom are encouraging you to buy a home. However, you may still wonder if buying a home is the right thing to do. Relax. Having reservations is normal. The more you know about why you should buy a home, the less scary the entire process will appear to you. Here are five good reasons why you should buy a home.
1. Pride of Ownership
Pride of ownership is the number one reason why people yearn to own their home. It means you can paint the walls any color you desire, turn up the volume on your CD player, attach permanent fixtures and decorate your home according to your own taste. Home ownership gives you and your family a sense of stability and security. It's making an investment in your future.
2. Appreciation
Although real estate moves in cycles, sometimes up, sometimes down, over the years, real estate has consistently appreciated. The Canadian Mortgage and Housing Corporation ( http://www.cmhc-schl.gc.ca/en/co/) tracks the movements of single family home values across the country. Its House Price Index breaks down the changes by region and metropolitan area. Many people view their home investment as a hedge against inflation.
3. Capital Gain Exclusion
Generally, any profit made on your principal residence that you make when you sell your home, is capital gains exempt. A "Principal Residence" is a home you own for you to live in. (For specific questions consult a tax professional)
4. Morgage Reduction Builds Equity
Each month, part of your monthly payment is applied to the principal balance of your loan, which reduces your obligation. The way amortization works, the principal portion of your principal and interest payment increases slightly every month. It is lowest on your first payment and highest on your last payment. On average, each $100,000 of a mortgage will reduce in balance the first year by about $500 in principal, bringing that balance at the end of your first 12 months to $99,500.
5. Home Equity Loans
Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18% to 22%. Home Equity loan interest is often much less. For many home owners, it makes sense to pay off this kind of debt with a home equity loan. Consumers can borrow against a home's equity for a variety of reasons such as home improvement, college, medical or starting a new business. Some provincial/federal laws can restrict home equity loans.
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