Homeownership Benefits: What are the benefits of Homeownership?

By
Real Estate Agent with Alaskan Spirit Realty Brokered by Realty ONE Group Aurora 17864

Buying a home is the latest trend in the market. One could hear everyone nagging about a new house. Why is it so attractive to buy a new home even after the historic downfall in market prices during the economic slowdown? According to the statistics, home prices dropped by a huge margin of 33 percent during the economic slowdown (from second quarter of 2006 up to April 2009). Most of the potential homeowners started questioning the benefits of homeownership. However, the truth is somewhat different. The long-term benefits of homeownership outnumber any drop in prices or economic suppression.

Benefits of homeownership

 

Home is one of the most fruitful investments for your family in a longer run. Homeowners could generate enough equity to get a loan against the home for the college education of their children. One should consider it as a long-term savings plan, which can strengthen their financial status over a period.

Important factors every homeowner should consider

  • Right time to buy home: With the mortgage rates staying at a substantially low level, this is the best time to purchase a house. In addition to the low mortgage rate, the additional federal tax credit for first-time homebuyers is another important benefit for homebuyers. Most of the experts agree to the fact that this is the most favorable housing condition for homebuyers.
  • Find a steady stream of income: According to the records, most of the sales incurred in recent months included first-time homeowners. If you are a first-time homebuyer, it is important to evaluate your employment situation before making any decision. With the unemployment rate at 10%, it has been difficult for most of the American families to maintain a regular income stream. You should consider job security before purchasing a new home.
  • Find out the pricing trend in your area: There is a significant difference between the national pricing trend and house prices in your neighborhood. The development in high-tech industries and high-end jobs has made some counties extremely lucrative over a long period. You should consider the local rental stock and compare the amount that you would pay for purchasing the house instead of renting. This comparison will help you find out the right time to purchase a new house in your neighborhood.
  • Manage your finances: A common problem among first-time homebuyers is the fact that they purchase homes that they cannot afford. If you are planning to purchase a new home, it is best to keep your monthly mortgage payment to 30 percent of your household income. You need to maintain an emergency fund for an accident toilet breakdown or roof leakage. If you are looking at your finance options, it is important to maintain a high credit score (720 or above) to get low rates. Potential buyers with lower credit score can also get approval, but at a higher interest rate.
  •  Choose passive approach: A new home is the biggest investment that most of the people would ever make in their house. You should not rely on the advice of your realtor and make sure to analyze potential risks in homeownership. Have a look at all the available options including short sales and foreclosures. These REO (Real estate owned) properties are available at an affordable range and allow you to keep the expenses marginally low. Pay proper attention towards your estate laws and all the charges you would be liable to after becoming a homeowner. 

Comments (10)

Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Between 2006 and today, our market lost 30% and then regained 75% of it.

Many would be sellers just settled in and decided to stay put.

Nov 21, 2013 07:18 PM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Good information for home buyers. I hope they will read this post.

Nov 21, 2013 07:51 PM
John F Muscarella
RIVER FARM PROPERTIES, LLC - Venice, FL
Broker/Owner, Venice, FL, Florida's Suncoast

It's always good to point out both sides of homeownership and go into a transaction with eyes wide open. 

Nov 21, 2013 08:43 PM
David Popoff
DMK Real Estate - Darien, CT
RealtorĀ®,SRS, Green ~ Fairfield County, Ct

A mortgage is a forced savings account, think long term and the equity you are saving.

Nov 21, 2013 08:52 PM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Yvette, it's always good to know all the facts before purchasing a new home. Good info!

Nov 21, 2013 09:16 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

I always remind my clients that purchasing a home is not a short-term investment. But if they make the right decisions for the long term and if they have control over when to enter or exit the housing market, they should do ok. I also remind them that while we don't want their home to lose value, if they are investing for high returns, they are probably better off with the stock market.

Nov 21, 2013 09:40 PM
Suzanne Otto
Six Twenty Designs - Lansdale, PA
Your Montgomery County PA home stager

The "long term" savings account is a big plus. And the fact that you're paying into yours, not someone else's savings account.

Nov 21, 2013 10:56 PM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

The main benefit just may be a silent peace that lingers within the heart....

Nov 22, 2013 12:06 AM
Yvette Belisle
Alaskan Spirit Realty Brokered by Realty ONE Group Aurora - Anchorage, AK
Associate Broker, REALTORĀ®

I always try to educate my first time homebuyers so they know what to expect when going into the home buying process. The more they know the more they understand and are willing to do the leg work to contribute to their long term asset.

 

Nov 22, 2013 07:53 AM
Ralph Gorgoglione
Maui Life Homes / Metro Life Homes - Kihei, HI
Hawaii and California Real Estate (310) 497-9407

Yvette, you are absolutely right. The equity one can build in a home is a great way to increase one's financial stability. Thanks!

 

Nov 22, 2013 08:11 AM