There are many pros and cons to buying a home versus renting, but this year in particular may be a good year for you to buy a home. While it’s impossible to “time” the market, no one can deny the fact that interest rates are relatively low.
Today I want to focus on three good reasons it might make sense for you to buy a home this year if you are currently renting and considering taking the plunge into home ownership.
1) You Can Build Equity
One of the biggest advantages of owning a home is that you can build equity as opposed to paying rent. First of all, rents are relatively high right now. This is in part due to the housing crash and the following economic recession. If you have the right financing, your monthly mortgage payment may even be lower than what you are currently paying in rent. Second, if you own a house you are putting money towards equity instead of simply renting a space. Of course there are other expenses that come along with home ownership. Some of these are expected expenses and others can come out of nowhere and take a chunk of change out of your bank account. If you have the income, savings, and you are in a position to buy, consider purchasing a home so that you can start building equity sooner rather than later.
2) Interest Rates are Rock Bottom
I think we all know that interest rates are pretty much as low as they are going to get. They currently sit around 3.5%, and there have been rumors of the rates going higher, not lower. Nevertheless, the Federal Reserve has said on many occasions that it will keep rates low as long as they need. This means there is no rush to run out and buy a house ASAP in case rates rise, but at the same time it’s important to keep in mind that they are low and the fact that you can lock in at these low rates for fifteen or thirty years is truly remarkable. Some home loans allow you to transfer this low rate to the buyer, which could easily be a bargaining chip when you decide to sell. If you want more information about interest rates consider checking out Newcastle Permanent Home Loans.
3) You Can Put Sweat Equity into Your Home
After buying a home last year, a huge advantage has been putting sweat equity into an outdated property. We were able to get a good-sized house in a great location within our budget because it had some slight cosmetic fixes that needed to be done. Since purchasing the home, I have learned a ton about home maintenance such as plumbing, electricity, landscaping, and more. Not only have I learned a lot, but I’ve made and will continue to make smart cosmetic changes that will make our house more attractive when we do decide to sell it.
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Photo by John Blyberg
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I wish we were debt free right now so we could scoop up a cheap home to rent out. Right now they’re all great prices still. However, I don’t want to get in over my head, so we’ll just have to purchase one later. If they’re still a great price.