So you’re thinking about buying your first home? You’ve come to the right place.
Decide if You Should Buy and Why You Want to Buy
There are plenty of good reasons to own the roof over your head, both emotional and financial. Here are four questions to ask yourself before you take the plunge.
- Why do I want to buy a home? Purchasing a home is a lifestyle choice. Begin to think about the type of community where you want to live. If you’re a first-time buyer, you will need stability in your career and the desire to commit. You should want to establish roots in a neighborhood. Homeownership can also be a powerful way to increase your personal wealth for you and your family, since you’ll be building equity as you pay off your mortgage.
- Is my financial “house” in order? If your employment situation feels secure and you’re prepared to stay in one place for a while, you might be ready to buy. Ideally, you’ve saved at least 20% for a down payment but there are new mortgage loan options that could potentially make your down payment as little as 3%. Believe it, it’s true! It’s also possible that your mortgage payment would be less than what you are currently paying in rent. But don’t forget the closing costs, insurance, taxes, money for repairs, and furnishings to turn the house to a livable home. These days mid-century modern sofas don’t come cheap.
- Am I ready to settle down? Home prices, on average, appreciate around three percent per year, which is why the old rule of thumb is buyers should stay at their new address for as little as three years to as long as seven years. Or, of course, forever! If you decide to sell within a year or two there’s a chance the increased value of your home won’t cover your closing costs. I recommend staying in your house for at least five years. But whatever life throws at you, you can always rent your home out.
- Can I fix a leak? No longer having a landlord is certainly a blessing, but owning a home requires either the ability to fix problems that may arise or the resources to pay others to fix them. With sites like Youtube, you may be able to become an ace at fixing household problems. Trust me, leaks are easier to fix then you may think!
Here are just some of the best reasons to buy your first home!
Quality of Life
The pride of knowing you own a piece of property! Even if it is a starter home or apartment style condo, it is yours. I get really excited each time I remember that a tree on my property is my tree. Ownership is an accomplishment! Speaking of only my own experience purchasing a home, and from my clients testimonials, your quality of life will dramatically improve. There is something calming and reassuring about being enclosed by four walls you own.
Why Rent When You Can Own?
Renting can be a stressful endeavor, especially in the crowded marketplace of Los Angeles. Your rent will most likely raise annually, your landlord may choose to sell at any time, and, most importantly, why contribute to someone else’s mortgage payments when you could be paying off your own? Would-be home buyers must decide between the flexibility of renting and the potential long-term payoff of homeownership. There are plenty of lenders (and I know some of the best) with many programs (some with 3% down) making it potentially easy to own a home. And with the current market increase in rent it can sometimes be cheaper to own than it is to rent and there is no fear of your mortgage payments suddenly increasing.
Investment
The price of real estate continues to increase every year, which makes purchasing real estate one of the safest long-term investments a person can make. A house will appreciate in value over the years whereas other large investments, like, say, a car do the opposite. In this way, the old adage is true: you have to spend money to make money.
Freedom and Privacy
Say goodbye to roommates, on-site landlords, and (maybe) shared walls. Owning your own home offers you independence and privacy. Have a pooch like me and tired of seeing “No Pets” on every rental ad? You will never have to worry about that again. You will be free to what you want in your own home, whether you want to paint the walls, remodel the kitchen, plant a rose garden, add a pool, or more, you’ll have the freedom to express yourself and your personal tastes and change the house to suit your needs.
Sense of Community
One of the best and most joyous aspects I’ve found of owning a house is the feeling it gives you of belonging to your neighborhood. Whether your dream neighborhood is Los Feliz, Echo Park, Eagle Rock, or anywhere, putting down roots will make you feel like you belong, like you’ve found your own little corner place in sprawling Los Angeles.
Equity
Another amazing thing about owning a home is building equity. Equity will give you more financial freedom to access a home equity loan. For a variety of reasons including starting your own business or paying for your children’s education, you may be able to borrow against the equity you have built in your home.
Tax Breaks
Tax laws continue to favor homeowners, so you’re not just buying a place to live – you’re getting a tax break! The biggest one is that unless your home loan is more than $1 million, you can deduct all the monthly interest you are paying on that loan. Homeowners may also deduct certain home-related expenses and home property taxes.
The American Dream
Let’s face it – we all grew up with the American Dream instilled into our brains. The idea of achieving the white picket fence, the house, success, and prosperity through hard work and determination. Although the white picket fence may be out of style in 2016, the other goals remain.
