Benefits of Owning Your First Home
Are you thinking about buying your first home? It is helpful to know what led other people to take that leap and buy. According to a recent survey of first-time homebuyers by PulteGroup:
“Individuals asked why they purchased their first home, the answer was simple: because they wanted to. Either the desire to stop renting or recognition that homeownership is a smart financial investment was the main motivator for 72% of respondents.” Here is some more information to help you think about the benefits of owning a home.
Buying a Home, gives you more stability than renting.
Does rent keep going up? If you’re a renter, that means every time you renew your rental agreement there’s a chance your payment will increase.
When you purchase your home with a fixed-rate mortgage, your monthly payment is predictable over the life of your loan. That kinf of stability and peace of mind can not be achieved with renting. Jeff Ostrowski, real estate journalist, breaks it down:
“With a fixed-rate mortgage, your monthly principal and interest payment is set for as long as you keep the loan. Sign a rental lease, however, and you could see your rent rise the following year, the year after that and so on.”
When you buy a home, you build equity with each payment and add to your personal wealth.
Even better, owning a home is a great long-term investment. Renting may seem to be the more affordable option, however, it doesn't prave an avenue to grow your personal wealth each time you make a monthly payment. Mark Fleming, Chief Economist at First American, explains that’s an important distinction to consider:
“Given current dynamics, more young households may choose to rent in the near term as the cost to own, excluding house price appreciation, has unequivocally increased. Yet, accounting for house price appreciation in that cost of homeownership, whether to rent or buy will depend on where, and if, a home is likely to cost more or less in the near future.”
Basically, renting doesn’t allow you to build your net worth. In contrast, homeownership can help you grow equity as your home’s value increases. If you keep renting, then you can never enjoy these perks.
When you think about that, it makes more financial sense to own then to rent.
The "BEST time to buy" always seems like it was last year or 5 years ago. Truth is, it's never the wrong time to buy and start building equity and wealth for your future!