Buying Your First Home - Making the Right Move
There are few things that are 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 now 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.
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 that towards your next home that is bigger, or newer and
so on. Did you ever wonder how some people afford such expensive homes? Chances
are that may be their second, third, or even fourth home!
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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