CONSUMERS: WHERE ARE YOU SPENDING YOUR MONTHLY "HOUSING" DOLLARS?
Do you rent your home? Or, are you buying your home?
Just because a budget for housing is moderate, that doesn't mean a person should forego the benefits of home ownership.
Inspired by a post this a.m. by Fred Cope. See HERE.
When buying their first home, the new home owners are probably going to acquire a long time debt. If the price of their new home is $100,000, the amount financed is probably going to be from 80% to 100% of the purchase price.
YOU DO OWN YOUR HOME. What is often overlooked is that, while the home purchase may be financed, the home is OWNED by the persons who purchased it. Following the purchase, owners will usually pay for the home through regular payments which are a combination of small but increasing re-payment of the principle (loan amount) and large but diminishing payments of interest to the entity who owns or is servicing that home loan.
ARE YOU MOVING FROM YOUR PARENTS' HOME OR FROM A RENTAL??
When first time home buyers are purchasing their first home, if they are moving directly from their family home, they will be acquiring a new monthly expense for housing.
If those first time home buyers have been renting, rather than paying monthly rent for housing, they'll be paying a monthly mortgage payment for housing.
Benifits of Renting. The obligation for monthly payments are limited to the terms of the lease agreement, usually one year. For transient employees, this may be a safe decision. Taking on the long term obligation of owning real estate involves certain risks. A few are:
Difficulty selling in short periods of time
Escalating mortgage payments with ARM products
Loss of income
Relocation for employment
Benefits of Buying. The most important benifit to home ownership is the stability offered for stability through long term occupancy. The dream of home ownership is supported by the money the housing industry contributes to the U.S. economy.
Permits long range planning for schools.
Growing wealth through property values
More choices for location in rural areas.
Ability to decorate and remodel to suit family needs
The potential of living free of a monthly housing cost.
Rent or buy. You'll still be making a payment for housing every month. Only through home ownership is the dream of living without a monthly payment for housing possible.
Another benefit of owning your own home.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988, serving home buyers in Loudoun County, Virginia.
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