I Want To Buy A House, Now What do I do?
Dated: September 30 2020
Over the next few weeks, I will be posting a series of posts geared towards first time home buyers. These articles will answer some of the most frequently asked questions my clients have had when becoming a homeowner for the first time. After reading this series of posts you may have a better understanding of the home buying process and be more confident in your upcoming purchase. If you ever have a specific question, feel free to text, call, or email me.
First, congratulations on getting started on the journey towards buying your first home. Buying a home is typically the largest investment we make in our lives and getting started may seem a bit daunting. However, you may not know about the many benefits of buying a home! Here are just a few of them:
Buying a home is a smart investment:
When you invest in a home, it offers the possibility for appreciation in value. This can increase the equity (the value of the home compared to the amount owed on your mortgage) you have in your home on top of what is paid off with your monthly mortgage payments. Historically, home values always increase, there may be some down periods as we saw about 10 years ago. However, over time the value of a home that is well cared for typically increases. In June of 2018, Forbes predicted that home prices would continue to increase at twice the rate of inflation. This means there may not be a better place to invest your income, we have seen about an 8% increase in home values over the last year. President Franklin D. Roosevelt wisely once said “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”
Since both mortgage interest and property taxes are tax deductible, homeownership can save you significant amounts of money every year when filing your taxes. When selling your home, if you buy another home with the proceeds, you will most likely not pay taxes on the profit of your home’s appreciated in value.
Owning your home stabilizes housing costs:
You decide how much you spend on your home, including repairs and improvements. Unlike renters, homeowners with a fixed-rate loan can lock in their monthly housing costs. We have seen rents increasing at about 3-4% over the last year. As demand for rentals increases, we can expect this increase in costs to accelerate over the next few years. Home ownership has more stable costs, taxes do increase but at a much slower pace. Repairs and improvements can be budgeted for over time or you can use the equity in your home to make repairs and improvements.
Creating a home instead of just having a place to live:
When you own your home, you get to make all the design decisions. If you have always wanted a cool accent wall, a deck, a brick patio, or perhaps a chef’s kitchen the choice is yours when are the owner and not just the resident. The added bonus is when you opt to make these types of changes in your home they typically increase the value of your home so you may see a return on your investment when you decide to move again.
These are only a few of the advantages to owning your own home. Over the next few posts, we will cover other advantages as well as how to get ready for your first home purchase.
If you have more questions about buying a home or any other real estate related questions, please feel free to call or email me.
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