There are many benefits to homeownership in any market. It’s important not to let the media tarnish your homeownership journey. And with average rent in Canada rising nearly 12% year-over-year in October 2022 to almost $2,000 – according to the National Rent Report – you may have even more incentive to buy a home.
Even when home prices or interest rates are on the high side, it’s still often more beneficial to own a home and build equity over time as opposed to continuing to pay rent so your landlord can build equity in their property.
Real estate has proven to be a solid long-term investment. And with rent continually increasing, it’s important to speak with your mortgage agent to see if now is the time you should buy.
Buying may also be wiser than renting because:
- Your landlord can raise your rent annually, while your mortgage payment will remain the same throughout your term.
- If your landlord decides to sell or move into the property, you may have to move.
- You can’t make changes to the property to suit the evolving needs of your family. Sure, you may be able to paint, but designing your dream kitchen is certainly out of the question.
Get preapproved for a mortgage
Before you even begin looking at homes, it’s important to first determine how much you can comfortably afford to spend. Not only will getting your mortgage agent to arrange a preapproval help you understand what lenders look for when granting you a home loan, but it will also prevent you from viewing properties that are out of your price range.
Your final mortgage approval will depend primarily on the value of the home you’re planning to purchase and the amount of your down payment. In addition, the mortgage rate you’re offered during the preapproval period is only guaranteed for a set timeframe – typically 90-120 days. And if any of your important financial information (job status, debt levels, etc) changes before your mortgage is approved and closed, this could negatively impact your chances of receiving a mortgage at all.
Even if you’re not quite ready to buy, your mortgage agent can advise you on important steps to take that will lead you to homeownership as soon as possible.
Have questions about whether now is the right time for you to become a homeowner? Answers are a call or email away!