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What Your Parents Didn't Tell You About Homeownership

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Homeownership is a great way to build generational wealth, but we know it’s an expensive endeavor that’s not accessible to everyone. This humble writer is someone who is still bogged down by student debt, making homeownership a distant mirage, so I sought out the homeowners in my social vicinity with the question “what did your parents not tell you about homeownership?” Here are some of the responses:

Consider property taxes

In Toronto, a residential property with an assessment of $700,000 can cost you $4,277.09 in annual property tax. These funds support education, the city building fund, and various city services such as the TTC, cost-shared social programs, emergency services, and more. Property taxes are important to consider when thinking about the carrying costs of being a homeowner.

Home insurance is more expensive than tenant insurance

On average the cost of home insurance for Ontario is $1,250 just over $100 a month. To put things in perspective, Ontario tenants pay $210, just shy of $20 a month. Home insurance varies depending on the value and location of your home, with Toronto being on the pricier end.

Repairs and maintenance add up

This is one of those “down the road” surprises, and usually not in a good way. Imagine your dishwasher stops working, or your plumbing is leaking, or your washer dryer is making a noise that it DEFINITELY wasn’t making last week, fixing these appliances can cost anywhere from a couple hundred to a few thousand dollars!

A mortgage isn’t easy to qualify for

Qualifying for a mortgage is the first hurdle and a mortgage application could get denied for the following reasons: low credit score, outstanding debt, insufficient down payment, high debt to income ratio, or even a recent job change. If your application is approved, you become the proud new owner of a home and the debt that comes with it for the 25 or 30 year amortization period. An amortization period is the length of time it takes to pay off a mortgage in full.

Your lifestyle changes as a homeowner

Now, this was an interesting one, the idea that traditional homeownership may not be for everyone. Some of us dream of stability, a mortgage and maybe starting our own families one day, building generational wealth through home equity within a bustling community and really putting down those metaphorical roots. But for others this isn’t really the case, we might want to travel the globe, maybe work takes us around a lot, or we want the freedom to go wherever there are opportunities to further our careers. In this case, the traditional homeownership model would be a burden rather than a boon. Traditional homeownership is a firmly established concept in our society, but that doesn’t mean that it’s the right solution for everyone, and that’s okay. It’s exciting to think that as the needs of people change, companies like Key are born to meet the demand. Through a co-equity model, Key has created a new channel for homeownership with the purposeful goal of making it affordable & accessible, years sooner. You can learn more about how Key works here.

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