Whether you have just been loafing in your parents’ basement too long, have just recently graduated from school, or find that you are able to finally afford the down payment on a house after months of saving, then it appears you are finally ready to start looking into buying a home. However, there are some naysayers who follow the line of thinking that home ownership is more trouble than it is actually worth and some might be better off if they rent. While every situation is unique and every person needs to figure out the best options for them, these are the top reasons for why buying a home is one of the best decisions you can make.
You Are Paying Anyways
According to the Arizona Group, you pay money for a house and towards a mortgage, whether you are buying or you are renting. The one key is that if you are actually buying, then the mortgage you are attempting to pay off over time is your own and not your landlords. The thing to remember from this mentality is simply that if you are going to pay anyways, then you should at least be the one who controls the payments, controls the equity that is earned, and controls the finances, including the interest from the payments.
When you think about the opportunity cost point of view for paying down a mortgage, the other side is always scary. This is true because if you think about your mortgage payment, then you can obtain a fixed payment mortgage that will be locked in for the same price for the duration of the mortgage. If you pay rent because you want it to be flexible, then you have to remember the flexible side of things for the landlord as well who could actually come right back and increase your rent every year. Clearly if you are going to pay, then you should at least make sure you are in control of the situation.
Owning is a Form of Forced Savings
When you think about retirement, regardless of where you are in life, that will still be one of the long term goals. However, many people find it difficult enough to pay their own bills and get by without having to live paycheck to paycheck. There are tremendousopportunities that come with buying a house. This is because you are essentially saving up for the future. Even if it winds up taking you an additional thirty years to pay off your home, when you do have it paid off, then you will have all of that equity and can possibly even use that to retire if at some point you are going to sell the home and buy a place that is cheaper at that time.
There are many specific strategies when it comes time to purchase, but if you are going to buy, then you should look to do so with a tremendous list and check all of your options out. Thebuy housefeature with DDProperty will allow you to look over many properties including options that will appreciate greatly over time and build equity, or ones where you can earn your own sweat equity as well. The key is simply having skin in the game for the long haul, and anyone who starts today can get there in only a number of years as long as they keep giving effort.
Payments Eventually Stop
While worrying about payments is a big deal for everyone, some people have the mentality that you will pay anywhere you go. With that basic mentality it would only make sense to understand why some people just don’t care, but at the same time you need to look at things just a bit deeper in general. Yes, it is true that payments may and actually should be very similar if you bought or rented a given house. However, the one thing you have to recall is that in the long run, you can get farther ahead if you buy.
Even if you want to do simple math for basic estimates, you can say that the average home buyer starts in their young twenties. By the time they pay off their thirty-year mortgage, this should put them somewhere around their mid-fifties. After all, they might have put more money onto the mortgage to pay it off quicker, or they might have sold their house and then started a new mortgage later. The point is, because the average life expectancy of people is decades beyond fifty and it will continue to rise as new medical technology comes out and people learn how to be healthier, you can already see the savings. If you buy a house, then you will have to pay to maintain it for thirty years or so, but after the fact, you will never need to make a house payment again for the remaining decades of your life. If someone who is renting continues to rent for thirty years, then after their thirty years they will be no closer to owning a house than when they originally began. When you rent, you don’t get ahead, but when you buy you are going to hit a point where you can stop worrying about the cost of housing.
It is hard to buy a house and assume that the prices will go up, because that is how the housing bubble blew up in everyone’s collective faces. That being said, when you think about the average home over time and you think about the home ownership market across the entire world, one of the best things about houses is the fact that people will always need them, and the materials and labor required to build new houses continues to rise. For those same reasons, it is the case that the average home price will rise and appreciate as well.
As Michael Bluejay discusses, there are not only many reasons why home appreciation is such a wonderful thing, but there are also many reasons why it continues to happen. Even though short-term average rates can be much more volatile over a period of only a few years, the truth is there is still a long-term appreciation for the average home. While appreciation may not be the most important thing in your world right now, the closer you inch towards your golden years and retirement or the closer you inch towards simply paying off your home, the more excited you will become when it comes time to sell or refinance. Even having those options could make other potential loans more affordable when you have collateral, and if nothing else, you will feel your pride swell as your net worth increases simply due to the appreciation of your home over time.
Whichever route you decide to go may in fact depend upon your specific circumstance, because there could be times when one side just doesn’t make sense. However, if you are strongly considering either renting or buying and you need to know which way to go, these examples should at least help to point you in the right direction with respect to why buying a house and doing so early on is such a great strategy.