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Buying
Your First Home |
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There
are few things as rewarding as buying your first
home. The sense of pride you feel can be enormous.
When you make the decision to go from renting to
owning, you are taking a step in the right direction.
Home ownership can offer tax benefits, freedom to
make decisions about your home, and investment benefits.
There are some benefits to renting; such as, short-term
obligation, no commitment to maintenance, and no
responsibility to other financial costs associated
with ownership. But renting should be viewed as
a temporary lifestyle. There are no long-term financial
gains to renting. In some cases, monthly mortgage
payments can be as low as renting. And by owning,
you have an investment you can use as collateral.
Homes appreciate in value, especially in steadily
growing communities. And, you can actually reduce
your house payment when interest rates fall, by
refinancing. You can't say that about renting! In
fact you can count on your rent increasing annually
and in some cases semi-annually.
Home ownership is a highly leveraged investment
that can yield substantial profit on a nominal front-end
investment. However, there can be costs incurred
in ownership versus renting. Such as the down payment,
maintenance costs and yearly tax payments. But again,
these costs are being applied to an investment.
At the end of the day, if you rent, you pay until
your lease ends with nothing to sell. In ownership,
the money you spend goes towards your profits from
appreciation in the value of your home.
Did you ever wonder how some people afford such
expensive homes? Chances are that may be their second,
third, or even fourth home! Don't be discouraged
if you can't afford the house you want the first
time you buy. Make sure the area is right and you
buy a house that fits your needs and budget. Buying
at or below your price range allows you to use the
extra money to do home improvements. Then in a few
years time you can put the house up for sale, sometimes
at a ten to thirty percent profit. You can then
take that profit and put it towards your next home
-- bigger, newer and so on.
As for evaluating the risk in buying a home, do
your homework. Take some time to investigate the
communities you are interested in, at least a few
months in advance to buying. Make sure you look
at the growth of residential and commercial building.
Look into the school systems to make sure they are
right for your children. By spending time in your
desired communities before hand, you can make an
informed decision regarding whether or not the community
is right for you and your family. Don't make the
mistake of buying in an area where the housing and
property are more expensive in hopes of increasing
your profit. More money spent on a property up front
does not guarantee you an increase in property value
over less expensive communities. Don't be in a hurry
to just buy a house. Buy the right house; remember
you may be there a very long time. By utilizing
your real estate agent's expertise and experience,
you can find the house that is perfect for you.
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