Many of us grow up being told that owning our own homes is one of the best investments we can make in life. However, is this really true? Before you sign up for that dream home you need to think carefully and consider the advice in the following article.
More than Just Mortgage Payments
The majority of people follow the supposed rule of thumb that if prospective mortgage payments on their own home are the same as their current rent payments, they should put their money into their own place. While it does seem like that this is sound reasoning, it is important to remember that owning a home involves so much more than just mortgage payments. When you begin the process you need to put down payment, which is normally in the thousands, rather than hundreds. Along with that you will have to pay property tax, insurance and spend money on repairs and any maintenance. Therefore, if you are considering whether it would be worth buying your own place or not, you need to add 40 to 45% on top of the mortgage price to find out the amount of money you will actually spend on your new home.
Plan for the Future
If you can afford the down payment and the extra costs that go along with buying your own home, you need to also consider how long you intend to live there. If you think you may relocate in the not too distant future, it may be better to stick with renting until you know you are secure in your career and relationship before buying your own home.
The Resale Value
If you intend to stay in the home you buy for a reasonable number of years, it could be prove to be a great investment. However, if you are looking to buy and then sell quickly, you might not make much profit on what you invested and you could actually lose money. You also need to give consideration to the possibility that if something changes in your life, such as work transfer or family bereavement; you may have to quickly relocate and may not get a fraction of what you paid for your home when it comes to reselling it.
Home Ownership Benefits
Taking all of the above into consideration, if you can afford the mortgage and various costs, intend on living therefore a good number of years and don’t think there will be any major upsets in your life that will force you to move quickly; there are many benefits that come from owning your home. As well as being a good choice of investment, you will not have to answer to a landlord, will be free to make home improvements of any kind, will be eligible for home-equity loans and may receive tax breaks.
Whether you decide to take the plunge and buy your own home or stick to renting for the foreseeable future is up to you. But, by keeping in mind the information above, you will at least be making an informed decision.