If you're financially prepared, buying a home pays off, even in today's market. Experts largely agree that buying and owning a home is still a smarter financial decision than renting for many. A lot of people will tell you that buying a home is a good investment, but that couldn't be further from the truth, says Peter Mallouk, certified financial planner and president of wealth management firm Creative Planning. Demand for homes will stay with us for a long time, especially as first-time buyers re-enter the market this year for their chance to own a home.
You'll need money for the down payment and closing costs of the mortgage, and for moving and other expenses after buying the home. On the other hand, if you took what you would save by not buying a home and invested it in something that would likely increase in value, such as stocks and bonds, you would most likely end up with more money in the long run. You can find homes for sale on your own, but a good agent can help you make sound decisions and guide you through the home buying process. One of the main benefits of owning a home is that, over time, increasing home equity can increase your net worth and provide you with a low-cost source of cash as needed.
After you make the decision to buy a home and calculate the amount of the down payment you'll make, you need to figure out how much you'll need to borrow and what type of mortgage you'll want to get. If you're more interested in a simplified buying process when it comes to rental properties, Roofstock should be your option. The great thing about buying a home with a fixed-rate mortgage is that “even if the value of your home increases, your monthly principal and interest payment will remain the same for the life of your loan,” says Jordan Fulmer, owner of Momentum Property Solutions in Huntsville, Alabama. But whether this is a good time to buy a home also depends on your financial situation, your life goals, and your readiness to become a homeowner.
Look for an attorney who has a history of working with buyers in your situation and who will contact you immediately. Thinking of their homes as perpetual investments, many turned to serial refinancing and ended up with an underwater mortgage (owing more for the house than the house was worth). But remember that in addition to the mortgage, buying a home includes additional one-time payments that can add up quickly, including closing costs, legal fees, and other expenses associated with the purchase, such as home inspection. While buying and managing real estate investments can be lucrative, it requires a lot of work and money, and involves a significant amount of risk.
Buying a home can seem like a daunting process, it may be the most expensive and emotionally charged purchase of your life.