Financial experts have been arguing for years about the pros and cons of home ownership. There is no black and white answer that applies to everyone. The truth is, it depends on your situation. Various monetary, lifestyle and personal factors all contribute to whether it’s best for you to start shopping for a home, or simply sign a rental agreement for a place that suits your current needs.
Smart Reasons to Rent a Home:
- You aren’t sure where you’ll want to live 12 months from now, but really need to settle down somewhere “for now”.
- You are cohabiting for the first time, and need a place to live before you figure out your long-term plans.
- You have just graduated from school and student debt is holding you back from making any major financial decisions.
- You’ve hit a few bumps in the road of life, and your credit report is limiting your ability to borrow.
Smart Reasons to Buy a Home:
- You have the perfect neighbourhood in mind, and you can imagine yourself living there for at least 2 years.
- You want to make an investment that will grow over time AND keep a roof over your head.
- Your household has steady employment and has established a monthly budget that allows for the purchase of a home.
- You are tired of paying off someone else’s mortgage!
Simply put, owning your own home makes the most sense financially over the long term. However, if making a large purchase will compromise your financial stability, or unforeseen circumstances will force you to sell sooner than planned, you may wish you had just continued renting.Although Calgary is currently experiencing a bit of a challenging economy, home values have yet to feel a major impact. Work with your mortgage lender to find out how you can pay off your home faster. This will allow you to reduce the interest that you will pay over the course of a 25-year amortization and, ultimately, save you thousands of dollars. Eliminating large monthly payments will help you save more of your take-home income in the future, and enable you to plan a comfortable retirement.