Buying a home is a lifelong dream for many, and it takes commitment and dedication to make it happen. With conditions in the housing market always changing, would-be home buyers need to stay up to date on the key aspects involved in buying a home.
Rates may be rising slightly, likely to rise 5.2% by September, but they’re still very low. Rents are also predicted to increase by 3.7%. This could leave you frustrated and paying someone else’s mortgage when you could be investing into owning your own home. Buying a house is a huge financial transaction and one that definitely shouldn’t be taken lightly but here’s the bottom line; it actually makes a lot of sense for many people to go ahead and make the leap to home ownership.
Owning Your Own Home Has Several Advantages
While renting has it’s advantages the following are advantages of buying that one should consider. Why let your landlord reap all the benefits?
- There are instances in which the cost of ownership can be less than renting.
- The buyer has control of the property and realizes that the acquisition of the home is a capital gain.
- The buyer has “forced” savings, which can be important when the buyer pays down the balance by a substantial amount.
- The buyer experiences tax advantages. Property taxes and interest can be itemized for tax deductions.
- The buyer experiences personal freedom by being able to redecorate, remodel, or make improvements as they see fit.
- The buyer experiences fewer restrictions. There are a fewer number of rules that the home buyer must abide by, which includes restrictions as far as pets, children, and noise goes.
- When mortgage payments are made on time, the homeowner can achieve a better credit rating.
Rent is expensive, according to a recent study from Trulia buying a home nation wide is 37.7% less expensive than renting. When you rent you are literally paying someone else’s mortgage with out the benefits of owning the home, like being able to customize your space or make energy improvements like adding solar panels or an energy-efficient roof. Even if your landlord allows you to make improvements to the home you are still wasting the investment knowing that renters can face unexpected notices of eviction if their landlord suddenly decides to sell the home, rent to someone else, or otherwise end the lease.
Right now home values are up and that means purchasing a home give you a better potential for gaining equity and the more potential your property holds as an investment. The way you gain equity in your home is making your monthly payments the closer you are to paying off your home the closer you are to outright owning it. If you own your home is worth more than you owe on it you have options to get more money back on a cash-out refinance and use the money for home improvements. If you are a renter you are not going to see any of the benefits of this equity, but your landlord does.
Act Now Before Mortgage Rates Increase
Mortgage rates are still great right now, even though there is no denying that rates are slightly up since the election. Economists predict mortgage rates will continue to climb, just one of the trends that suggest 2017 rates will be the highest near September. If you are on the fence about home ownership now is the time to make a purchase. These trends predict a potential cost of waiting that could lead to unwanted results. If home prices and/or mortgage rates increase, so too will the total monthly payment required to finance and own a home.
While the economy is never perfect, you should feel pretty good about where it stands right now. Unemployment rates are down. While short-term interest rates have been rising this also could actually give you more buying power. As interest rates rise savings will start paying you more meaning more money on your savings account to help offset higher mortgage rates…
Ready to start owning and stop renting? Midge & Co can help you check that off your list! Take a peek at our perfect home finder and if there is a property that you would like more information on or that you have a question about, don’t hesitate to reach out to one of our agents. We’re here to make sure you are able to see the house that could be your next home.