credit, or even losing the house. It’s better to rent if your life is in flux and buy when your stress levels are lower. Are you ready for commitment? Are you prepared to make many decisions, from picking a real estate agent to picking paint colors? Are you confident enough to choose a neighborhood where you believe home values will continue to appreciate and that will serve your needs (i.e., proximity to schools, shopping, recreation, etc.)? Are you ready to devote time and attention to maintaining a home (i.e., leaf-raking, grass-cutting, appliance maintenance and repair, etc.)? Taking care of your most significant investment can be gratifying, but only if you’re ready.
ADVANTAGES OF BUYING YOUR HOME
Control over housing expenses. By selecting a fixed-rate 15-, 20-, 25-, or 30-year mortgage, the homeowner is assured that housing costs won’t increase over the period and will be eliminated at the end of the term (subject to refinancing). You build equity. Some of each monthly mortgage payment goes toward the loan’s interest. Other portions may go to homeowner’s insurance and county taxes. The remainder pays down the loan principal. Every dollar put toward your loan’s principal represents a dollar of equity — actual property ownership. Further, the property should appreciate each year, adding to equity (what the house could be sold for versus what is owed). Discounting specific blip periods, such as the 2006 housing bubble burst, home prices in the U.S. appreciate nationally at an average annual rate between 3% and 5%. Remember that home value appreciation in different metro areas can be appreciated at markedly different rates than the national average. Improvements increase your home’s value. A homeowner can also increase a home’s value through home improvements, thus
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