Homeownership is an important part of the American Dream for many people. For some families, it may be their only option to build wealth and create a legacy.
Others may want to buy a home because they’re tired of renting and want more stability in their lives. Whatever your reasons are, you’ll need to consider whether or not buying a house is right for you before making any rash decisions.
In this blog post we will discuss: The importance of homeownership in America, the Pros & Cons of Buying Vs Renting, How to Pay For Your New Home, and Getting Ready To Buy A House.
Why Homeownership Is Important?
Homeownership is a big decision because you are buying a lot of responsibility. But it has many benefits- such as stability and security.
Owning your own home also means you can create your own space and find the perfect neighborhood that suits you.
Homeownership also provides the opportunity to build equity. It allows the homeowner to create their own space with options that suit their needs, desires, and lifestyle.
Homeownership provides a way to build a person’s net worth. This happens when the debt is paid down and the equity Increases.
There is nothing like having your own space that you can call your home. That is why it’s so important.
Because homeownership allows you to put your name on a deed. And when you have a warranty deed you are considered the owner of the house.
Homeownership is an integral part of the American Dream. The number of Americans who own their homes has been declining for years, and it now stands at 64%.
This decline in homeownership can be attributed to a variety of factors, including the high cost of housing and student loan debt.
Pros & Cons of Buying vs Renting
The decision to buy or rent a house or apartment is based on many factors. We need to look into the pros and cons of each decision and then make an informed decision. After analyzing the factors, we can make a more informed decision on whether we should buy or rent our home.
Buying a home requires some money upfront as well as careful budgeting for the future.
Buying a home requires that you be in charge of the maintenance and repairs.
Buying a home requires that you have at least a credit score of 620. It can be possible to buy around a 580 credit score but this would normally mean you would need a larger down payment and would have to go FHA and not Conventional.
Buying is the more expensive option. You can also think of it as investing in your future.
Buying a home requires that you do a mortgage for at least 15 years, 20 years, or 30 years. Which ever one you can afford at the time that you apply for a loan.
Buying a home does require that you apply for a loan and it is considered debit until the home is paid off.
Renting, however, does not require any upfront payment and is more flexible in terms of mobility and time frame.
Renting is paying for the use of the property for a while, usually one year.
Renting provides you with a way to be in your place even if you have bad credit.
Renting is convenient because you do not have to worry about maintenance costs and repairs.
Renting allows you the ability to move around from place to place.
Renting, however, does not require a large upfront payment and is more flexible in terms of mobility and time frame.
How to Pay for Your New Home
If you are planning to buy a new home, then you must consider the different ways to pay for your house. There are many different types of loans available and each has its benefits and drawbacks.
As with any purchase, the more time you take to weigh the pros and cons of each option, the better decision you will make.
A mortgage is most probably the most common form of financing for buying a home.
There are many different options when it comes to mortgages.
But most people will choose between fixed-rate mortgages with lower monthly payments or adjustable-rate mortgages with higher monthly payments that allow for lower interest rates over time if investors expect interest rates to fall in the future.
With either type of mortgage, you can choose how long you want them to be in force.
Typically you will have mortgage terms for around 15 years, 20 years, or 30 years.
There might even be some programs that are available that have longer loan terms.
It’s not always easy to pay for your mortgage. You need to know how much house you can afford or how much you can put down on a home.
Other costs need to be taken into account, like monthly property taxes, insurance, and utilities.
This is why it is important to shop around for a good mortgage company and have a good loan officer who can explain these terms and conditions to you.
You want to also make sure you find a mortgage company that will give you a good closing cost percentage.
This is something you will need to ask the company you choose when you are ready to get pre-qualified for a loan.
Getting Ready to Buy a House
Ashlee and her husband have been talking about buying a house for quite some time.
She’s always loved living in this area but was worried they wouldn’t be able to afford it with two kids at home as well.
Ashlee was wanting the perfect place that is close enough to take the kids to school and yet would be perfect for family members to come over to visit.
To help with this process she hired a Realtor to help her find properties that are close to what she wanted.
The process of finding a home did take some time due to the market being a good market and properties not sitting long on the market.
The one thing that helped her was that she made sure that she had full Approval through the lender. This means she got all her documents into the lender.
By doing so, Ashlee cut the underwriting process in half. One of the other things she did was she narrowed down where she wanted to live.
From there it was just a matter of finding the right place.
Have you ever felt the way Ashlee did? Finding the right house to buy can be a daunting task, but not impossible.
You need to take into consideration your budget and what you’re looking for. It’s important to look at the neighborhood, schools, commute time, and recent home sales.
If you don’t like older homes and like newer homes, then do some research about the builder.
Make sure you understand what the final new build price is. Because there has been an increase in supplies prices. Some builders have increased the final price.
This causes some issues because you were budgeting around one monthly payment now you have to deal with a slightly higher monthly payment.
Make sure you ask the builder upfront “Is this price final or will the price change closer to closing?”
Know what your closing cost is before and at the beginning when getting your Good Faith Estimate Statement.
The Good Faith Estimate Statement is the mortgage industry’s way of giving borrowers a sense of what closing costs will be at the time they close. This helps borrowers budget and understand their financial responsibilities.
When you receive this, look at the projected monthly payment. Ask your loan officer to go over a few price point scenarios.
You want to do this if you are in a hot market and because property owners will ask you for your highest and best offer if a bidding war happens.
It’s better to get the amounts now vs waiting until the bidding starts and then you have to find your loan officer who might be busy and unable to get back to you before the bidding date has ended.
Conclusion
It’s always important to take a step back and look at the big picture. The American Dream is about so much more than just owning your own home, but it will always be an integral part of that dream.
Owning your property can give you peace of mind in many ways–whether you’re looking for stability or financial security, there are plenty of reasons why homeownership may be right for you.
Whether you want to buy now or later on down the road, these tips should help get you started thinking about how homeownership might work for you!
Let me know if this article helped answer any questions or concerns that came up during your research process.
I’d love to hear what resonated with you most from this post today.