The Million Dollar Question: Should you buy a home?

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At some point in your life, you’ve probably asked yourself whether it’s better to buy or rent a home, especially considering purchasing a home is one of the biggest decisions you’ll ever make.

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Ultimately, the decision is a personal choice, but it helps to look at the pros and cons of buying to determine whether homeownership is right for you.

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Owning a home is generally considered to be a sound, long-term investment that can provide satisfaction and security for you and your family.

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Each month when you make your mortgage payment, you are building equity in your home.

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Equity is the portion of the property that you actually build through your monthly payment versus the portion that you still owe the lender.

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At the beginning of your mortgage, more of your payments go toward paying off the interest and less toward paying off the principal. But the longer you stay in your home and the more mortgage payments you make, the more principal you pay off and the more equity you accumulate.

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There is also a tax advantage. If your home is your principal residence, any profit you make when you sell it is tax-free. In our case, Mo and I purchased our first home in Brampton. It was a starter home that was “affordable”, in close proximity to work and had enough space for us to grow our family. That home appreciated over the course of two years and helped by allowing us to use the equity we had built up towards a down payment for our next home.

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Buying a home also allows you to decorate and improve your home any way you like. I’m a huge fan of decorating and accessorizing (catch me @ HomeSense every weekend), and owning a home tends to give you a sense of pride by doing things “your way”.

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If you do decide that home ownership is right for you, it’s important to choose a home you can afford. If you can’t afford to buy your dream home, purchasing a more modest home is a great way to start building equity that one day may allow you to buy the home of your dreams.

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Since it’s easy to get caught up in the excitement of buying a home, it’s important to remember that home ownership comes with some additional responsibilities as well.

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For one thing, a home can be expensive. Chances are, your monthly payments will be more than what you are currently paying in rent when you factor in such things as your mortgage, property taxes, repairs and general maintenance.

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While your home might increase in value as time goes by, don’t buy with the expectation of a quick return. There are no guarantees that your home will increase in value, particularly during the first few years. In the beginning, you could actually lose money if you sell because your home may not have appreciated enough to cover the real estate commissions, moving, renovations and other selling costs.  

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Real estate is, however, usually considered a good long-term investment.

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When making the decision about whether to buy, it’s important to carefully choose a home you can afford, and then weigh the pros and cons. Millions of people enjoy the rewards of home ownership but, ultimately, it’s a personal decision based on your own priorities and circumstances.

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If you don’t know what’s right for you, don’t hesitate to reach out and we can chat through your options!

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