Buying a home is likely the biggest financial decision you’ve made in your lifetime, so we totally understand that it may seem a little scary. And, we’re not sugarcoating it over here, it’s definitely a bit overwhelming, but it can also be an exciting, rewarding and pretty epic experience.
Wondering why you should even consider buying a home? Maybe you’ve got a pretty cushy deal going on with your landlord or you don’t want to fork out the cash for the down payment. Maybe you’ve heard that inventory in Atlanta is really low.
Well, more than likely, your landlord raises the rent at any opportunity and that cash you feel like is being thrown away on a down payment is actually building equity for your future.
And, yes, inventory in Atlanta is low. Our buyers can definitely attest to that, but they’ll also tell you that if you’re patient and move quickly on the right option, it’s totally worth it, especially since interest rates are at phenomenally low rates making it much more affordable to own.
So what are the benefits to buying? We’re sharing 8 awesome reasons with you right here!
1. You’ll own a home that is “yours” – It can be customized to your specific taste from paint colors to remodeling.
Say you want to build a big back deck to grill out on in the evenings or to entertain your family and friends, or maybe you want to paint your bedroom that trendy shade gray you’ve been eyeing?
If you rent, you’ll have to ask your landlord for permission, but if you own, you can do whatever your heart desires. Plus, those updates will benefit your bank account when you resale rather than your landlord’s.
2. Owning a home builds wealth – It can be a very savvy financial move.
It’s true, the past decade was a little rough on the real estate market, but that had a lot to do with the fact that people were purchasing homes they simply could not afford. We’re in a new market now and as long as you stick with a home that you can comfortably afford, you’ll gradually build wealth.
Plus, our current market is in an upswing in most areas. Home prices are steadily rising. In some areas, we’ve seen median home prices rise as much as 8%! If you make a smart investment in a good area, you’ll likely see your home increase in value too.
But, wait, won’t the prices eventually stabilize or even drop? Yes, home prices do move in cycles, but it’s typically over the short-term, so if you stay in your home long enough, it can increase in value and provide you with a substantial return on your investment.
3. You’ll build equity – Who doesn’t love equity?
Equity in your home is the amount you can sell it for minus the amount you owe on your loan (i.e. your profit). You can build equity in 2 ways:
- Every month, when you make a mortgage payment, you reduce the amount you owe, thus increasing your equity.
- As your home increases in value, it creates more equity for you.
Here’s a real life example: You purchase a home at $300,000. You put 5% ($15,000) down as your down payment when you close on your home. Your loan is $285,000.
A few years later you decide to sell your home so you can buy an even bigger, better home. When you go to sell your home, not only has the value increased to $350,000, but you have also paid down your mortgage to $225,000. You sell your home at top dollar for $350,000. You pay off your remaining loan ($225,000) and you put $125,000 in your bank account. Cha-ching! That’s your equity! Get it? Got it. Good!
4. You’ll have a forced savings plan – And, let’s be honest, that’s a good thing!
Have you ever added up how much you spent in rent in a year? We did that once and it left us feeling extremely sick to our stomachs.
Let’s say your rent is $750 a month. (And, it’s important to note that this is on the lower side these days). $750 over 12 months is $9,000! Yep, that’s almost $10k in just one year. Feeling sick yet?
Although it may feel like you’re spending money every month when you pay your mortgage, it’s actually more like a forced savings account. Your payment reduces the amount you owe each month and you’re building up more valuable equity in your home.
5. You’ll have stability – You may like to live on the edge, but a little stability is nice once in awhile.
Rental rates can rise over time (we’re definitely seeing that in today’s market), but with a fixed rate mortgage, your monthly payments will stay the same making it easier to budget and save for your future.
6. You may have tax benefits – Yep, you heard us correctly, tax benefits!
Interest on your mortgage and property taxes may be deductible. When interest on your monthly payments is the highest in early years, this can be a massive savings.
Do you know about the Homestead exemption? If not, ask us, because it’s a reduction on your property taxes on your primary residence, and it can save you some very pretty pennies.
Also, the first year you buy your home, you may be able to claim some closing cost deductions.
7. You’ll be getting a great deal on an interest rate – Seriously, they’re phenomenally low.
Interest rates are as low as many have ever seen in their lifetime and it’s likely that they may never be this low again. Although the low inventory in the housing market might be a little frustrating, if you’re patient and you move quickly when the right option becomes available, it can be a great opportunity to lock a loan in at an extremely low rate.
8. Most importantly, you’re not throwing away money on rent – You have to live someplace!
Yes, it’s sometimes more affordable to rent, but that’s usually only in the beginning. As the interest on your home decreases (which it will do every time you make a payment), the interest that you’re paying will eventually be less than the rent you would have been paying.
MOST importantly, you’re not throwing all that money away on rent. Remember, that $9,000 we talked about earlier? Why give that to your landlord? Use it to pay your mortgage and build equity for you future, not your landlord’s!