Top 7 Benefits of Home Ownership in Victoria

It is a significant event finally buying your first home, or even a new home. Home ownership means putting down roots and having a space that’s truly yours. Buying a home in Victoria can feel like a daunting task at first. However when done properly, buying and owning a home in Victoria limits your financial risk, increases your investment power and saves you a ton of money in the long run. Let’s have a look at the top 7 benefits of home ownership in Victoria.

Renting vs. Home Ownership

Choosing to rent or buy is a major decision that affects your financial health, lifestyle and personal goals. There are several differences that make renting and owning a property distinctly different. Renting doesn’t come with the responsibilities of home ownership and you have more flexibility as you are not tied down to the property, but you also aren’t building any equity and can have significantly less stability. 

When you buy a home, it will be a place you can always rely on, since it will be yours. Being secure in the home you reside in can make all the difference. Those looking to establish roots, start a family, or have creative freedom over their living space should consider buying over renting. When you buy a home you experience a sense of accomplishment, you worked hard to buy your home and can now make it anything you want. Decorate and furnish it anyway you want. Design and maintain it to your standards of beauty. Your home is an extension of your personality, and every upgrade only adds more value to your home!

7 Benefits of Home Ownership in Victoria

Home ownership is more than about just the roof over your head and building equity. There are so many incredible advantages of owning a home in Victoria that can be very rewarding. If you are on the fence about purchasing your first or next home here are the top home ownership benefits you can feel great about.  

1: Home Ownership Builds Equity, Equity Builds Wealth

A mortgage lets you build equity ownership interest in your home. Home equity is one of the most valuable benefits of homeownership. Equity is the difference between the value of your home subtracted by what you owe on the mortgage. Your equity will continuously grow as you pay down your home. The value of your home will appreciate, or increase over time. 

Building equity in your home is a ready made savings plan. When it comes to long-term financial growth, real estate is your ace in the hole. As a general rule, home values appreciate over the long term. Home ownership is one of the few investments that allows you to increase the value of your property from simply living your day to day life. 

2: You Can Control Your Monthly Payments

Owning a home gives you certainty in housing costs because your mortgage payments (depending on the terms of your loan) stay largely consistent. Unlike rent, a fixed rate mortgage payment wont increase over the years so your relative housing costs actually go down the longer you own your home. You can also make bigger payments as you increase your finances and pay off your mortgage in Victoria even faster. You have more control over your financial stability when you own your home, which enables you to manage your resources more wisely and concentrate on other investments. 

3: The Value Of Your Home Will Increase

The value of your home increases over time, making your investment grow. As you pay off your mortgage, you build ownership interest – which is called equity – which offers financial flexibility. Your home is also a legacy financially or otherwise for the next generation. The value can increase with home improvements, inflation, a growing neighbourhood, etc. Buying a home is one of the best long term investments you can make. Another plus of home equity is it provides flexibility to get a loan tied to the value of your home equity which we’ll explore next.

4: You Can Convert Your Home Equity To Cash

From renting out a spare room to taking out a home equity loan, you have a number of options in your arsenal to monetize your biggest asset. You likely already know that property is an asset that you can tap into and raise a significant amount of cash if needed. This is useful in both a tight financial spot and can serve more long-term serving financial goals such as starting a business, buying an additional rental property and many other investments. There are so many ways that you can use the equity in your home. We recommend you talk to our mortgage experts at Prime Mortgage Works to learn more about the many ways you can turn your current or future home into equity.

5: You Will Continue Building Credit

Owning a house in Victoria can regularly raise your credit score. As long as you make all your payments on time,  your credit score is going to gradually increase. Please note that at the start of the home buying process your credit score will drop. But after a few months of on time payments, your score will be back to normal and then will exceed what it was before. Buying a home can strengthen your status across multiple credit scoring categories. Here are a few ways that buying a home can increase your credit. 

1. Payment history: Is the largest category of your credit score, accounting for 35% of your overall credit. Paying loans and lines of credit in time will improve your payment history. 
2. Your credit limit will increase after buying a home: This higher credit utilization ratio can help you to tap into additional funds and borrowing power.  
3. You diversify your credit mix: A diverse credit mix will strengthen your score. A mortgage demonstrates that you can maintain and balance the responsibility of having multiple types of debt.  
4. Extra and early payments can boost your score: Paying your mortgage on time will improve your payment history. Consistent, early and additional payments help your score and show lenders as well as credit bureaus that you repay your financial obligations in a timely manner. 

On top of this, here are a few more ways that home ownership can increase your credit score.  Any home renovations paid on a credit card, HELOC – home equity line of credit, etc when all paid off on time increase your credit score. 

6: You Can Make Any Improvements and Renovations Yourself

One of the biggest pros of home ownership is that you can turn the house you can afford into the house of your dreams little by little. When buying a home, you can truly make it your own by making any renovations and changes you desire. Switch out that light fixture for a brilliant multifaceted chandelier? Want to knock out a wall for a more open concept layout? Build a deck for more time outside in the beautiful Victoria weather? Even small changes such as changing the home’s hardware and paint can make a massive difference in not only how you enjoy your space, but also these upgrades and improvements increase the value in your home. 

7: It Enhances Your Quality of Life

Home ownership has many benefits that enhance your quality of life and positively impact on family wellbeing. Your home is the place you call your own. Home ownership increases stability for you and the community you live in. Once you get settled, you make friends, get to know your neighbours, and develop a sense of community. This helps to maintain a safe thriving environment for your family and community. Home owners tend to have better physical and mental health, they report a greater feeling of control and self determination over their lives.  Where families are concerned; children with greater residential stability have better academic performance and greater psychological wellbeing. Home owners and their families frequently have improved health, educational attainment and personal wealth.  

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Owning a home is more than just a financial decision. Your investment goes far beyond taxes and equity. Owning a home is an investment in your community, its surroundings like schools and parks. It’s an investment in your family’s stability and consistency by having a place to call home. Owning your home allows you to build memories and to build a new life around the people and things that matter most to you.  

Most importantly, home ownership in Victoria is an investment into your present, and your future.

Contact Prime Mortgage Works today to learn about securing your mortgage in Victoria.