If you’re currently renting and your lease is about to end, you might have noticed that rental costs in Edmonton and the surrounding areas have skyrocketed. This trend has many renters considering whether it’s time to consider buying instead of renting a home.
The Rising Cost of Renting in Edmonton
The cost of renting a home has increased dramatically, putting pressure on many renters. If you find yourself in this situation, it might be time to consider buying a home. While it may seem daunting, there are many ways to gather a down payment and make the transition to homeownership.
Gathering a Down Payment
One option is to borrow money from your RRSP (Registered Retirement Savings Plan). Another is to consider opening a First-Time Home Buyer Savings Account where you can contribute up to $8,000 per year, growing tax-free until you withdraw it for your home purchase.
You can also borrow money from family members, including parents, grandparents, and siblings, for your down payment. This is a common practice and can significantly ease the financial burden.
Finally, borrowing from a line of credit is an option, although not recommended. The cost of mortgage default insurance would be higher, and you would have to make payments on both the line of credit and the mortgage, putting more strain on your monthly budget. Additionally, this could leave you underwater if you need to sell the property, meaning you owe more than the house’s current value.
Benefits of Homeownership
Transitioning from renting to owning a home has several benefits. When you make mortgage payments, a portion goes towards paying down the principal, which builds equity in your home. This makes it similar to a forced savings plan, helping you build wealth over time.
About Jason Scott, Edmonton Mortgage Broker
Looking for a personalized mortgage solution? As an Edmonton Mortgage Associate, I’ll be your trusted partner who will help you get the right mortgage for your family home or Investment property. I’m Jason Scott, and I’ll be your Mortgage Broker in Edmonton.
