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Is Now the Time to Buy a Home?

ADVICE Author: Steve Dyment

I hear a lot of people talking about the housing market lately, especially whether now is a good time to buy. While I appreciate all different perspectives, here is why I think 2011 may be great year to become a homeowner.

1. Low Interest Rates

Ask anyone who owned a home during the early 80's and they’ll tell you: Mortgage rates are incomparably low right now, with fixed rates at all time lows for the last 30 years. To offer perspective, in 1981 a competitive fixed rate mortgage was 21%. Currently, that same mortgage can be had for less than 3.4%. Lower interest rates means smaller payments and a greater portion of your payment going straight reducing your outstanding loan.

2. Housing Market off Peak Levels

Since 2008, many regions of Canada have seen a decline in home values, with the Okanagan being no exception. While this is a nuisance to current home owners, it’s a definite plus to those waiting to buy. Think of it like this: what you are buying now is at 10-20% discount to the price it was only two years ago.

3. Appreciation

While markets may be unpredictable in the short-term, in the long-term the trend is the same: upwards. In fact, Canadian real estate appreciated on average 4-5% between 1950-2008. Better that be your cash in your pocket than a landlord’s.

4. Capital Gains Tax

A huge tax break is available to Canadian homeowners: Any capital appreciation that occurs on your primary residence (the house you live in) is not subject to capital gains tax. So, unlike your investments, you don’t have to pay tax on your home when it rises in value.

5. Forced Savings

This one is so simple yet so beneficial. Take a typical mortgage payment at a current market rate: part of your payment goes toward interest but the other part is applied directly to the principal. In short, it’s like you’re putting several hundred dollars into a bank account each month just by making your mortgage payment.

6. Mortgage Interest Deduction

For many people operating a home-based business, their home represents an opportunity to take advantage of certain tax deductions. I recommend talking with a tax professional for specific advice on whether your home business is eligible for tax deductions on mortgage interest, property taxes, maintenance costs and more.

7. Pride of Ownership

It feels great to be a homeowner. There’s more security and peace of mind knowing that you now own your property. You no longer have to answer to your landlord and you can enjoy your home as you see fit. Painting a wall, tackling renovations or a landscaping project are now things you can do that can increase your home equity while making it more enjoyable for you as well.

Conclusion

There are many more, but here are some of the main reasons I feel now is a good time to be getting into a home. If you have questions about home-ownership, mortgages, or are seeking a recommendation for an outstanding real estate professional, pleases don’t hesitate to contact me.

Contact Information | Creative Mortgage Corp.
Name:	Steve Dyment
Company:	Creative Mortgage Corp.
City:	Kelowna
Province:	British Columbia
Country:	Canada
Phone:	(250) 470 9154
Email:	Email
Website:	http://www.creativemortgage.ca