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, destroying credit, or even losing the house. 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 selecting a real estate agent to choosing paint colors? Are you confident enough to pick a neighborhood where you believe home values will continue to be appreciated and that will serve your needs (i.e., proximity to schools, shopping, recreation, etc.)? Are you ready to devote time and attention to maintaining a home (i.e., leaf-raking, grass-cutting, appliance maintenance and repair, etc.)? Taking care of your most significant investment can be gratifying, but only if you’re ready.
ADVANTAGES OF BUYING YOUR HOME
Control over housing expenses.
By selecting a fixed-rate mortgage, the homeowner ensures that their housing costs will not increase for the next 5 years. Mortgages are typically renewed after 5 years at the current interest rate.
You build equity.
Some of each monthly mortgage payment goes toward the loan’s interest. Other portions may go toward property taxes to the city. The remainder pays down the loan principal. Every dollar put toward your loan’s principal represents a dollar of equity — actual property ownership. Furthermore, the property should be appreciated yearly, adding to its equity (the difference between what the house could be sold for and what is currently owned).
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