Are you tired of renting and thinking of buying a house instead? Welcome to the club. According to recent studies, 1 in 4 adults would like to buy a house in the next year. However, you’ve probably discovered by now that a change in your housing preference hinges on several factors. It’s not always so simple as deciding to buy a home. Or is it?
First time home buyers often struggle with the same issues. You may be concerned you don’t make enough money, or that you have too much debt, or that your credit is not up to par. Well, you may be surprised that buying a house is more in your reach than you thought.
Why Buy a Home Instead of Renting
Aside from the emotional benefits like the pride of home ownership, people choose to buy a home for many reasons:
Buying a home is traditionally a great long term investment. The value of homes tend to go up in value over time. The housing market can sometimes be volatile, so there is no guarantee that you will build a lot of equity over a 5 or 10-year period. However, over 30 years the value of a home tends to almost always go up. Real estate investing, even if it’s just your own home, is a smart, safe financial move most of the time. You’ll also find that there is not much difference between what you would pay monthly on renting an apartment or on renting a home versus buying a home. Instead of paying rent with nothing to show for it the next month, why not put that same amount each month into a strong personal investment?
While the equity on a home presents many different financial opportunities, you’ll also find some other benefits, like tax breaks. The first few years of paying your mortgage will include most of your payment going toward interest. You can deduct a percentage of your interest paid from your taxes, giving you an added bonus to owning a home.
If you plan on not moving for some time, then buying a home is a great decision. Maybe you got a job that is going to keep you put for a while. Perhaps you have the ability to afford a long-term home in a desirable neighborhood. Maybe you just got married or are getting married and you want to settle down. Or perhaps your family is growing and you need to focus more on the future. Whatever the reason, buying a home is a great decision if the season of your life is telling you to do so. Buying a home brings a new level of stability to your life that you’ll be glad you’ve found.
Sometimes a concern for first-time home buyers is the maintenance required on a home. Renting puts that responsibility out of your hands. It’s true, buying a home means you are responsible now if something breaks or needs to be replaced. However, a good Realtor® can help you asses maintenance costs and weight the benefits. It may not be as much trouble as you think.
One of the reasons people avoid buying a home is that they believe they are not in a place, financially, to do so. While having too much debt can be a deterrent, it doesn’t mean you have to be completely debt free. In fact, the preferred debt-to-income ratio is around 36%. You may still qualify for a home loan with a higher debt-to-income ratio, but it would be better to pay down your debt first, before you buy a home.
You should also have some money saved up for a down payment. It is possible to buy a home without a down payment, but proceed down that road with caution. Take the time to save a down payment for the house you want. It will pay more dividends in the long run.
But What If…
You may be thinking that you don’t match some of these suggestions. Even if all the boxes aren’t checked, you may still be able to buy a home. If you think buying a home is out of reach, give us a call today. You maybe surprised what is possible. Your own home may not be just a dream after all.