If you’ve been on the fence about becoming a homeowner, now is the time to take a leap. Don’t let the all the negative press deter you from one of life’s greatest joys. Here are some of the advantages of homeownership.
- Equity. Homeownership is about building long-term wealth. Historically, homes have appreciated at 4 to 6 percent a year. Although home values have seen hard times since 2006, experts are confident the housing market will recover. While buying a home may come with some hefty initial costs – downpayment, closing costs, inspections – you will make that money back over time by building equity built in your home. A home purchased in 1960 for $20,000 is worth at least ten times that amount today. When you pay rent, that money is gone for good.
- Relationships. Renters tend to see their neighbors come and go quickly. Some people sign 1-year leases while others may be in the community for a shorter term. Homeowners stay put much longer (at least three to five years if they hope to recoup their closing costs). This allows more time for you to develop relationships – and research has shown that people with healthy relationships are happier and less stressed.
- Predictability. If you have a fixed-rate term on your mortgage, it is predictable. Most people buying homes today know that a fixed-rate is the way to go. If your mortgage payment is $1100 today, it will still be $1100 a month in 10 years. This allows you to budget and make solid financial plans. During the sub-prime crisis, homeowners with adjustable rate mortgages saw their monthly payments rise, and then rise some more – causing many of them to fall behind in their payments and lose their homes. Homeownership generally comes with predictable expenditures – you know that each year you’ll need to pay for gutters to be cleaned, lawns aerated, etc. Even bigger expenses are predictable – average life of a furnace is 20 years, average life of a water heater is 15 years, etc.
- Ownership. Homeownership means you “own” your home – that comes with some incredible perks. You can renovate, update, paint, and decorate to your heart’s desire. You can plant trees, install a pool, expand the patio, do decorate for holidays. The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years.
- Great Deals. It’s a great time to buy. Interest rates are at historic lows – 4.0 percent instead of 6.0 or higher. This means big savings for today’s buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income, good credit, cash for a downpayment (3.5% of the purchase price for an FHA loan), and expect to remain in the home for at least five years, now is the time to buy.
Homeownership can be a real joy. It’s time to get off the fence and into a home that is right for you!