During the recession, home values decreased, leading many people to believe owning a home might not be worth the risk.
In the long run, however, owning your own home has proved to be one of the best investments anyone can make. The recession was an anomaly, not the rule. While it was painful for some people to struggle through the downturn, values are appreciating quickly as the demand for homes is once again seeing an uptick. If you are still renting and wondering if it would be prudent to look into purchasing a home rather than continuing to rent, there are several factors to consider when making that decision.
Fire Your Landlord!
Every month when that rent is paid, you get no return on that money. It’s simply gone. Yes, you have a place to stay, but renting doesn’t allow people to alter the property to fit their own needs or even make updates to improve the property’s function. When you own a home, on the other hand, every payment you make puts you one step closer to actually owning a property free and clear. Even if you decide to sell at some point there will be equity available to use for purchasing a new home or for some other worthwhile purpose.
Market Values Increase Over Time
Again, the downturn we all went through is an exception, not the rule. Even now, those who weathered the recession are seeing their values returning to their pre-recession levels. Of course, every community is recovering at different rates but, in many areas, there have been rather dramatic increases in value over the past couple of years. This year promises even higher values, suggesting those on the fence about buying a home should consider making their decision soon. Historically, real estate has proven to be a solid investment, even when short-term downturns occur. Simply waiting out recessionary downturns protects the home investment, as prices have always gone back up.
Enjoy Pride of Ownership
While good renters take care of their rental unit, it still isn’t theirs to update or improve in any way. Money that is spent benefits the landlord, not the renter, as most improvements are not portable. When you own a home, that’s not true. Every improvement is yours to enjoy and benefit from. When your circumstances change, additions can be made to accommodate new needs or remodeling can make a home much more comfortable. You don’t need to beg the landlord for updates or repairs, you simplyw take care of it in a way that best suits your needs.
Have Peace of Mind
Most people need the security of owning their own home – a place to put down roots. It’s human nature to need the knowledge there will be a place to retreat to at the end of the day. That means families will know how to effectively budget without the uncertainty of potential rent increases looming in their futures.
Where Do You See Yourself In Five or Ten Years?
Of course, no one can know exactly what the future holds, but we all have dreams and plans we’d like to see come to fruition. What are yours? Do you foresee job changes that might require a move to a distant city? Are you thinking about going back to school? Each option will impact any buying versus renting decision, so it’s important to honestly discuss your dreams for the future when deciding to purchase a home.
If you’re just getting married, buying that one-bedroom condo may make sense but, before doing so, it pays to think about how things might change in the coming years. Those considering a family, for example, might find it a better idea to reconsider that one-bedroom unit in favor of a home that can accommodate a child or two. As a couple, it would be a good idea to talk about the advantages and disadvantages different property types offer.
How Much Money Is Needed to Buy a Home Now?
There are stories going around about the huge down payments needed to buy a home today. While there are some financing options that do require a significant down payment, other options are very affordable. At Fellowship Home Loans, we have programs available with as little as 3.5% down. That means you don’t have to scrimp for years before you can qualify for a home loan. There are even down payment assistance programs to help borrowers get into that first home. For our veterans, we have programs with 0pct down payment through our VA loan product. If you really want to get out of that rental unit and into your own home, we can help.