Borrow Money

Advantages of Buying over Renting

There are many advantages to owning a home:

Security: A feeling of security that comes from owning a home and the knowledge that your home is a safeguard against inflation. You are the only one that will have the keys.

Investment: Payments on your mortgage mean that you are acquiring a major possession over time. Instead of rent, every payment you make means you own more and more of your home. The garden that you plant, the permanent improvements you make – all enhance your way of living as well as the value of your home.

Tax Advantage: Depending on your situation, all or portions of your real estate tax and interest on your mortgage may be deductible from your income tax. Check with your accountant to see what benefits home ownership may have for you!

Saving Money: Buying is usually cheaper in the long run. In the first few years renting may be cheaper but over time the interest part of your payment should be lower than comparable rent.

Leverage: You can buy a house nowadays with as little as 3.5% down. This is not possible with many other types of investment. Imagine you buy a house for $600,000 with 3.5% = $21,000 down payment. If the house appreciates in one year by only 5% (current inflation) = $30,000 then you now have increased your equity by 142%. Of course leverage works the same way against you – if the house loses 5% in value then you just lost all your equity. This can be a little like playing roulette. Do not believe anyone who tells you that a certain property is guaranteed to go up in value. If that was so, why does this person not buy it himself/ herself? I do not recommend buying a home as a short-term investment as in “less than 10 years”.

Some other advantages of home ownership include:

Sense of pride: This is a “feel good” reason — but it’s true, at least for most people. You’ll have a greater sense of accomplishment when you own a home.

Steady payments: As a renter, you run the risk of your lease cost going up. With a fixed rate loan, you can set your payment and keep it there for the duration of the term.

Better credit opportunity: It will be a lot easier to apply for other loans if you already own a home. You can build equity over time and borrow against that equity if you choose to. Credit card companies typically favor homeowners, which is why you’ve probably noticed that one of the early questions in credit card applications is, “Do you rent or own a home?”

Freedom: You can do whatever you want to your home. You don’t need the landlord’s approval every time you want to paint or redecorate.

Ready to get started ?

Speak to an Evoque Lending Specialist at 1-800-505-8121