Given the fluctuating (and current!) housing market, it’s sometimes easy to wonder “Is it worth it to buy a house?” The steps to becoming a homeowner may seem daunting, and we get that. The positives of owning a home often far outweigh the negatives that many may perceive around the process. Not to mention, working with a local lender who will take the time to understand your personal situation makes the process that much smoother.
As we celebrate Homeownership Month, let’s take some time to go over some of the positive outcomes associated with owning a home.
FINANCIAL BENEFITS
First off, you’re no longer renting. You aren’t subject to changes in the market leading to raises in your rent each year, you’re no longer putting your hard-earned money into a landlord’s pocket, no longer paying potential pet fees or deposits, and there is no risk of the property being sold out from under you forcing you to move out at the last minute.
Owning your own house may also provide more privacy depending on where you choose to purchase and what kind of home you decide on. A lot of freedom comes with being a homeowner and not depending on the ever-changing market or a controlling property manager. In the long term, you spend less money when you aren’t constantly hiring movers, renting moving trucks, putting deposits down, and coming up with the first (and sometimes last month!) rent.
Speaking of financial benefits, it’s usually easier to make and stick to a budget when you are in control of how much you are spending on housing costs. Your mortgage will likely stay pretty much the same (depending on which loan program you choose), with some variations if you refinance down the road, or if your insurance and taxes change in price. If you make the smart choice to get pre-approved, you will know your limits when making the purchase. Additionally, you can sell the home and downsize (or supersize!) down the road if you want to. Depending on your preference, you can get more land and spread out, move closer to a new job, or further from the city.
FUTURE FINANCIAL BENEFITS
Building equity is another big financial benefit of home ownership. You want your home’s value to be higher than the amount owed on the property.
There are a few ways to build up that equity:
- Buy a fixer-upper at a low price and renovate it.
- Put down a large down payment.
- Make additional payments toward the principal when able.
- Refinance down the road to get a better interest rate and/or shorter loan term.
- Make improvements/renovations to the property.
Before you start working on any big projects in your home and looking to increase the value, consider what other homes with similar specs are worth in your area. For example, if you put $10,000 into a project and it will only increase the value by about $5,000, that money might be better put elsewhere.
Being a homeowner and making regular payments will also improve your credit – and a good credit score is powerful.
A higher credit score can:
- Lower interest rates on loans and credit cards, which could save you hundreds or thousands of dollars.
- Secure better rates on insurance – most states pull credit to include in calculating your premium, and higher credit scores can lower that premium – saving money in the long term.
- Help you get a better interest rate when it comes time to refinance or purchase a new home.
PERSONAL BENEFITS
On an individual level, there are many other benefits to owning a home. Claiming your own space can give you a sense of stability, roots, and a sense of community. A home is more than just an address – it can be a symbol of belonging. This is a large reason why so many people take pride in their cities and towns.
“There is an emotional side to home ownership, particularly in the United States – it’s often baked into people’s vision of the future or part of the American dream,” said Tom Figgatt, president of Portolan Financial in New Orleans. “And it does feel good to own your own house; you can feel like it is a home and not just a temporary dwelling.”
You can paint or decorate a child’s room, build (or finish) a basement, or design the ideal backyard. Owning a home gives you the power to modify your space however you choose to express your personality.
Owning a home may also even improve your health! A 2019 survey of Habitat for Humanity homeowners found 74% saw an increase in their family’s health. Some of that may be due to homeowners’ perceptions that they’re safer living in a neighborhood with other homeowners who take pride in their homes and community. Additionally, you aren’t reliant on a landlord to keep up with important maintenance such as mold prevention, plumbing, heating, or air quality.
When you purchase a home and procure a mortgage you are more likely to stay in that home longer than a renter would. When you buy a home to stick around, you’re also more likely to invest in your community. You’ll get to know your neighbors, find some favorite cafes and shops, and actively engage in solving local problems that may come up in your neighborhood.
NEXT STEPS
If you think you’re ready to start down the road to homeownership and reap the many benefits noted above, GoPrime is here to help. When considering becoming a homeowner, it’s important to remember that credit is part of your financial power. Be sure to take unexpected costs into account when applying for your loan to help you consider a realistic budget, and don’t forget that GoPrime offers many mortgage programs tailored to assist you on your road home. We provide personal, individualized support to be sure we find the right loan for you.
Find your local loan officer and reach out today!
