It’s no secret that millennials have been waiting longer and longer to buy their first homes. It’s a function of many things like the job market. If you’re a millennial paying rent, it’s time to consider buying a home.
Whether you realize it or not, you’re already paying someone’s mortgage. You can call it rent or a housing payment, but either way, that money goes out of your bank account and into someone else’s. When you pay rent, someone else is getting the benefits and equity from that money since you’re paying down their mortgage.
Also consider that your landlord, whose mortgage you’re paying, also makes money from market appreciation. Last year, we saw about 6.9% appreciation on average nationwide. For the median-priced house, that equated to about a $25,000 gain in one year just from market appreciation.
<div class="pullquote">“Don’t disqualify yourself just because you don’t think you have enough money for a down payment.”</div>
Thirdly, there’s no secret that you want to express yourself by what you wear, what you drive, and where you live. This is difficult to do as a renter because of the restrictions on your ability to customize your place. You can’t change the color of the walls or the exterior of your house or apartment. As a homeowner, it’s all up to you—you can make the home your own if you want.
Owning a home also probably isn’t as expensive as you think. In fact, your rent payment is probably comparable to a mortgage payment for a place in the same style, size, and locationthat you currently rent in. Be sure to understand the costs of buying a home because interest rates are still very low and you can buy a house for a mortgage payment that’s very similar to your current rent payment. The big difference is that every time you make a house payment, a portion of it goes back into your pocket instead of down the drain.
Finally, don’t disqualify yourself just because you don’t think you have enough money for a down payment. It may be true in some cases, but in many cases, it’s not. We’re still getting buyers into homes with no money down. Very few people buy a home with 20% down anymore. There are various home buying plans that can make your budget work.
The current cost of money with interest rates is so cheap that it benefits your 20- or 30-year outlook to lock in a home loan interest rate now while they’re so low. Property is a good investment that you can leverage over time thanks to low interest rates.
If you have any other questions about buying your first home, give me a call or send me an email soon. I hope to hear from you soon!