Many people find themselves scrimping and saving for years with the goal of becoming homeowners in mind, only to find themselves consistently asking one question: “Can I really afford to buy a home?” Chances are, the answer is yes! In many cases, owning a home is more affordable than you think.
High Interest Debt Versus Low Interest Debt
Your mortgage is usually considered low-interest debt–that is, you won’t pay insanely high interest rates just for the privilege of borrowing the money for your home each month. If you have a car loan of $25,000, chances are, you’re paying $500 a month for your car. On the other hand, if you take out a mortgage for $250,000, you’ll be paying less than $1,200 monthly. In many cases, this makes owning a home far more affordable than you initially thought! Many borrowers, in fact, are surprised by just how low their monthly payments can be. If you’re still on the fence, contact your mortgage lender to discuss what your house payments will actually look like. The difference in real payments versus your expectations may surprise you: in some cases, borrowers find that they’re able to pay less on their mortgage each month than they’re currently paying in rent!
The Benefits of Owning
Okay, you can afford to buy your own home – Is it really that beneficial? The reality is, there are a number of benefits to owning your own home instead of renting, including several financial benefits.
You’ll build equity in your home. When you pay rent each month, you’re paying to build equity in someone else’s home. That’s money that’s gone forever! When you own your own home, on the other hand, your monthly mortgage payment is building equity in your home. Eventually, that may mean that you can sell your home for the amount that you’ve put into it–and in some cases, especially if you hold onto your home long-term, you’ll be able to sell it for significantly more.
You have predictable, fixed costs each month. Most people opt for a fixed-rate mortgage on their homes. That means that their costs don’t change even if the rental market in the area changes. Your rent, on the other hand, may change without much warning. Your landlord might opt to raise rent yearly; your property might change hands, with a new landlord who wants to charge more for your rent. Worse, you may find yourself moving on a regular basis in order to escape bad landlords, which means that your costs are constantly changing. When you own your own home, on the other hand, you’ll be able to more effectively prepare and control your budget.
There are tax advantages to home ownership. In some cases, these vary by year or based on the upgrades that you’ve performed on your home for the year. The important element, however, is that when you own your own home, you do get those tax benefits–and if you’re renting, someone else is collecting them in your stead. The interest on your mortgage and the amount you pay in property taxes each year, for example, are tax deductible amounts. There are plenty of great reasons to buy real estate now, and the tax advantages often help to make it more affordable!
Should You Buy New Construction?
Many people start out thinking that if they’re going to buy their first home, they should buy something older: something that’s stood the test of time, for example, or maybe something that’s looking a little worn around the edges–and therefore is more affordable. There are, however, several reasons to buy new construction instead of opting for a resale.
You get to choose the final details. When you buy new construction, especially if you buy a preconstruction home, you’re often able to choose those little details that will take a house from “pretty” to “yours.” This can make it easier to fall in love with your new home–not to mention making you happier in it.
New homes don’t have to be out of your price range. Take a look at some new construction and consider how it will fit into your budget. You’ve already put some consideration into the size home you can afford as you began preparing for house hunting. Chances are, that new home is more affordable than you think!
You aren’t inheriting someone else’s problems. People move out of houses for a wide range of reasons. Sometimes, it’s because they need to change geographic areas or need a new home due to changing family size. Other times, however, they move out because there are Problems with a capital P. Your home inspector will do their best to predict those problems and help you avoid them, but you may not be able to avoid them all. With new construction, on the other hand, you’re less likely to find the issues you’d get in a new home.
You’ll get a great home warranty. If something breaks during your early days in your new home, you won’t have to stress out over repair costs while you’re adapting to your new, homeowner budget. Instead, you’ll have a home warranty that will help cover the cost of repairing or replacing those items. Everything in your house is new, from the roof to the appliances, and that means you’ll get quality items you can count on–and a warranty to back them up if they don’t.
Buying a new house is more affordable than you think–and you don’t have to wait around for the perfect time to buy. If you’re looking for new construction that is the perfect place for you and your family, look no further! We’ve got the home you need.