Should I purchase a home or continue paying rent? Is now the right time to buy, or should I wait until next year? What can I really gain from buying a house? These are some of the feelings many of us experience and the questions we often have regarding buying a home, as it is a major decision that affects your financial health, lifestyle and personal goals.

Both renting and buying a house require a regular income (so you can afford the payments and associated costs) and may also require a certain degree of effort to maintain. However, the idea of breaking the cycle of renting and the potential to leave a legacy for the next generation puts you in the driver’s seat for your future.

Renting a property does not come with all the responsibilities associated with homeownership and you have more flexibility, as you are not tied to your property. Buying a home, however, signifies putting down roots, financial stability and in some cases making that transition into adulthood and setting the stage for generational wealth.

Every parent’s hope is to provide their children and even their grandchildren with the means to live healthier, happier and more prosperous lives. So that when it comes to developing generational wealth, property plays an important part. In essence, a home is usually one of the largest assets the average person will own and such a large asset appreciating over time typically results in huge profits, which, if used correctly, can positively impact the next generation’s wealth.

In today’s edition, we highlight the 5 ways to benefit from taking the plunge into homeownership:

1. Building equity 

Owning a home allows you to build equity versus paying rent, where you do not gain any kind of ownership. Every rent payment you make to your landlord, creates more wealth for your landlord. Why use your hard-earned money to make your landlord rich instead of building your wealth by investing your money in an asset you own? 

Home equity is the market value of your home minus the outstanding mortgage balance. Your home’s equity, which is an excellent source of funds, builds over the years. It can be used to finance expenses such as education, debt consolidation, investment and medical expenses, initial funding for investment opportunities, including commercial property and even a cushion during the tough times.

Making a large down payment, making on time mortgage payments, making lump sum payments to your principal balance, making home improvements/upgrades that increase your property’s value, and property value appreciation due to developments in the surrounding areas, are all ways in which your home’s equity will naturally build over time.

TTMB’s maximum applicable Debt Servicing Ratio of DSR has increased to 45%, enabling you to qualify for a higher amount and gives you the power to leverage your property to accomplish any financial goals and build generational wealth.

2. Tax savings 

There are tax deductions made specifically for new homeowners: You can reduce your annual income tax by up to $30,000. You can claim this tax deduction on the mortgage interest you pay for up to 5 years after buying or building your first home, provided the property was bought on or after January 1, 2011.

3. Long-term appreciation

Have you ever looked at housing prices from 50 years ago and been shocked by how much they have increased in value? It is never too early to buy property, and the sooner you do, the better your chances of securing substantial long-term gains. The value of your home may appreciate, adding to your net worth and future resale value.

4. Fixed monthly payments

As a renter, you have no control over rent increases. As a homeowner, you can obtain a fixed-rate mortgage loan, meaning you will be able to lock in your monthly mortgage payment for the term. 

5. Take advantage of low interest rates

Remember, your mortgage interest rate is the percentage of your loan balance that you pay to borrow money from a lender to buy a home. We have seen low rates for so long that the idea of rates increasing may be hard for us to fathom right now.

With mortgage rates currently at a comparative low, now may be the right time to take advantage of an incredible opportunity.

Mortgage interest rates can be either fixed or variable dependent on the type or term of the loan. Mortgage interest rates affect the cost of borrowing money and the monthly payments of the loan. TTMB offers more stability to customers than the banks’ rates with 2% and 5% mortgage interest rates for first time home buyers and the open market rate, currently at 6%.

Own Your Future… Opening to new possibilities

At the end of the day, one of the best ways to grow generational wealth is to invest in real estate as a homeowner, developing an equity or ownership stake that you can pass down to the next generation. Therefore, your home can be a key financial resource for you and for your family.

TTMB is committed to your financial success and helping you build generational wealth. With TTMB as your reliable mortgage partner, homeownership is within reach. Take the First Step Today!

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