It’s a question of value
Home ownership is considered the ideal for so many reasons. Stability, intergenerational wealth creation, and security in retirement are just a few reasons why people buy a home. Renting a house or apartment has it’s own benefits, such as low-maintenance, rent control, and the ability to move without the expense of selling. Let’s compare the two and see which one might be best for your situation.
When you’re comparing the two, ask yourself which scenario suits your lifestyle better. Buying a home is a popular choice and best suited for those who want to live in the same property for 7-10 years. If you’re intending to buy and then move within 7 years, your costs can exceed the appreciation (depending on area), which means that renting is the most cost-effective choice.
A larger down payment . . .
- 20% or more down eliminates the need for mortgage insurance – a savings up to 4% of the purchase price
- Reduces the amount of your monthly principal and interest payment
- Reduces the total amount of interest you pay over the life of your mortgage
Three alterntive financing options are available
Norfolk Home Ownership Program
- Provides down payment assistance to first time homeowners who are qualified low-to-moderate income households wishing to purchase a home. Funding is provided in the form of a 20-year interest free loan registered on title and up to 10% of the purchase price of the home. Funding is provided in the form of a 20-year interest free loan registered on title and up to 10% of the purchase price of the home.
RSP Home Buyers’ Plan
- The RSP Home Buyers’ Plan (HBP) lets a first-time buyer withdraw up to $35,000 from RSPs for a home purchase. The withdrawn amount must be repaid within 15 years, subject to a minimum annual repayment that is 1/15 of the amount withdrawn.
Federal Shared Equity Fund
The incentive is available to first-time homebuyers with qualified annual incomes of $120,000 or less. A participant’s insured mortgage and the incentive amount cannot be greater than four times the participant’s qualified annual income.
- 5% or 10% for a first-time buyer’s purchase of a newly constructed home
- 5% for a first-time buyer’s purchase of a resale (existing) home
- 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home
CMHC, Genworth Financial, or similar companies insure mortgages up to 95% of the lending value of the house. Eligible borrowers include anyone who buys a home in Canada intending to occupy it as their principal residence. Buyers who insure a mortgage loan with CMHC or Genworth pay a premium. The premium is based on the down payment and loan amount.
Contact our office for more information.