Owning a Home: Weighing the Options
Owning a home is a huge accomplishment and a dream of many. As we grow older and may graduate college, get married, or plan for a family, many start to question the role homeownership may have in their plans. It may be hard to put an exact number on the value of owning a home, but in this blog, we’ll look into some of the perks and why spending the extra money may be worth it in the long run.
A Large Investment — But is it Worth it?
One of the biggest factors to look at when buying a home is the current state of the housing market. A lot of these factors are outside of your control, and nobody has a crystal ball to tell you when the perfect time to buy is. Another component to weigh is your personal finances to see if you’re in a spot where purchasing is possible. Something else to take into consideration is your individual goals for purchasing. Some may include:
- Building generational wealth
- Making a relatively stable, lower-risk investment
- You plan on making this home your permanent residence and living there long term
- You’ve calculated that it will be less monthly cost than renting
Buying vs. Renting
If you’ve been renting for a while, you recognize some of what makes renting appealing- having the freedom to move around, not managing and upkeeping a property, but you’re losing out on the equity in the property. The amount you’re paying in rent is ultimately lining the pockets of the landlord or leasing company instead of your own.
The Benefits of Homeownership
There can be several benefits of owning your own home, including:
- Can be cheaper than renting: securing a mortgage with a low-interest rate and steady monthly payments can give you more control over your finances, whereas a landlord can raise the rent and price you out of the property.
- Building equity: generally speaking, real estate is a fairly solid investment. If you sell your home for more than you paid for it, you’ll probably end up making a profit from the sale. You can use this money to finance a purchase of a new, larger home. You can also use that equity when you’re still living in the home by securing a home equity loan. A home equity loan lets you borrow money based on how much equity you have in the home. You can use these funds to make improvements around the home or pay for medical bills, for example.
- Having control of the property: when you own a home, you’re free to make changes and adjustments to match your taste. This may not always be the case with renting. You can change up the landscaping, paint colors, finishes, and more to your desire.
- Building a sense of community and belonging: With owning, you’ll have a little more stake in the game when it comes to the overall community.
- Increasing your overall net worth: adding real estate to your investment portfolio is again, generally a good investment. Of course, the housing market ebbs and flows over time, but the vast majority of homeowners make a profit on the sale.
Next Steps
If you’ve decided that homeownership is right for you, here are some next steps to consider:
- Start saving! This is the most important first step.
- Calculate what you can afford, how much you have for a down payment, and don’t forget to factor in closing costs in your calculations.
- Get pre-qualified for a mortgage with a reputable mortgage company
- Hire a real estate agent and start researching homes in your area
Clarion Title: Your Partner in the Home-Buying Process
When you’re ready to make the investment and purchase a home, Clarion Title is your partner in the closing process, ensuring you understand all aspects of the contract and title insurance. When you’re looking for a real estate title company in Birmingham, Alabama is your premier partner. Give us a call today at (205) 291-0083 or contact us online.
This material is provided as a courtesy and for educational purposes only. Please consult your title professional for specific information regarding your situation.