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“Your Money” with Ian Thomas
The CTV Morning Live “Your Money” segment features our
VP, Retail Operations, Ian Thomas. Every Tuesday at 7:40am,
tune in for Ian’s advice on financial issues that matter to you.
April 15 - Rent or Own?
Spring means that there the housing market heats up with lots of listings flooding the market. But, is buying the right way to go for everyone? Not always. Here is what you need to consider when making the call:
There are three key questions to start with: what you want, what you can afford and your lifestyle.
Once you’ve got a better idea of what you are looking for, meet with your financial advisor to discuss where you’re at with your money. Crunch some numbers together and compare the costs.
A general guideline to determine whether you can afford to buy is to allow no more than 30% of your gross monthly income to make your monthly housing payments.
Factor in additional costs to home ownership. Yes, there are not only property taxes, but also maintenance costs and sometimes strata fees, depending on what you buy.
Plus there are one-time closing costs, things like: legal, appraisal, housing inspection fees, the property purchase tax and HST on a newly built home.
And you’ll need a down payment - at least five percent is required, but if you can, more is better. For example, on a $350,000 home – you’re looking at a down payment of at least $18,000, if not more.
Something else you might not plan for is paying a bigger hydro, gas and sewer bill, especially if you’re moving into a larger home. It helps if you do a budget forecast to see how things will look before you buy to get an idea of how your cash flow would be impacted.
A home is a very valuable asset - besides being able to put down roots and decorate your house how you want, you’re building up equity and increasing your net worth with every mortgage payment you make.
Plus, once you’ve paid off your home and you’re mortgage free, use those dollars you used to spend to beef up your retirement savings, pay down other debt, or save for a vacation. But, it isn’t the best financial move for everyone, take the time to break out the costs and take a good look at your current situation and your next five years. That will help you determine whether you should rent or buy.
Looking for more helpful information? Check out Ian's past segments