(No. 16), large mortgage or loan (No. 20), change in living conditions (No. 28), and change in residence (No. 32). If someone has recently made other life changes, such as marriage (No. 7), switching careers (No. 18), or having a child (No. 14), it might be wise to postpone buying a home. Stress overload can lead to missed payments, resulting in damaged credit or even losing the house. Sometimes it's better to rent if your life is in flux and buy when your stress levels are lower. Are you ready for commitment? Are you prepared to make numerous decisions, from picking a real estate agent to picking paint colors? Are you confident enough to choose a neighborhood where you believe home values will continue to appreciate and that will serve your needs (i.e., proximity to schools, shopping, recreation, etc.)? Are you ready to devote the time and attention to maintaining a home (yard work, appliance maintenance and repair, etc.)? Taking care of your biggest investment can be gratifying, but only if you’re ready.
ADVANTAGES OF BUYING YOUR HOME
Control over your housing expenses. By selecting a fixed-rate 15-, 20-, 25-, or 30-year mortgage, the homeowner has the assurance that housing costs won’t increase over the period and will be eliminated at the end of the term (subject to refinancing). You build equity. Some of each monthly mortgage payment goes toward the loan’s interest. Other portions may go to homeowner’s insurance and county taxes. The remainder pays down the loan principal. Every dollar put toward your loan’s principal represents a dollar of equity—actual property ownership. Further, the property should appreciate in value most years, adding to equity (what your house is worth versus what is owed). Discounting certain blip periods, such as the 2007 housing bubble burst, home prices in the U.S. appreciate nationally at an average annual rate between 3% and 5%. Remember, though,
21
Powered by FlippingBook