There may be plenty of reasons to buy a home whether it’s expanding your family, wanting to grow equity, or just want something that will appreciate in value. Buying may be right for an individual or it might not be. There are some benefits and common-sense reasons to purchase a home and take out a mortgage but it may not work for everyone. Here are some common-sense reasons to buy a house and take out a mortgage.
Mortgage payments are superior to rental payments.
You may have heard the statement if you can afford a rental payment you can afford a housing payment but that’s not always the case. A mortgage can carry debt with it and this is tied to the property as collateral. You might be building equity over time but it is one of those things that you should stay with for quite a while. If you’re planning on moving within a year or two, taking out a mortgage could cost you in the long run. Your mortgage payment will also include property tax, homeowners insurance, and potentially mortgage insurance depending on the type of loan. And remember, even if your rental payment on your mortgage payment are the same price, if something breaks, you are responsible for it. However, if the price is the same and you have a little bit of cushion, you are still building equity by making a mortgage payment over a rental payment.
Home prices are always increasing.
Even if prices drop, they will continue to rise overall. The mortgage payment will continue to build equity and eventually, the homeowner will own the property outright. However, if people rely on housing prices to increase for equity or savings purposes and they don’t wait long enough, this might not be an adequate investment. It’s important to stay in the home long enough to reap the benefits of the housing market increase.
You have an investment that you can live in and use.
No other place can you actually use your investment while it is making you money. You get the benefit of using the investment, living in it, renting it out for even more cash flow, or flipping at all the while increasing the cost of the house and increasing your equity and profit.
Read More: How to go from renting to buying
Pride of ownership.
There is nothing more American than the American dream of homeownership. You have someplace that you can live in, support, take care of, and pass on to your family.
There are a lot of benefits to buying a house but you have to decide if those benefits will work for you or not. If you’re planning on staying in a property for several years and you can take out a decent mortgage, it might be time to consider homeownership.