If you are thinking about becoming a homeowner, it is important to see your house as an investment. A home is an asset with the potential to increase your financial stability over time. Unlike renting, where you pay your landlord’s mortgage without seeing any return yourself, homeownership works to broaden your financial worth. After purchasing a home, owners enjoy an increase in equity as they continue making payments, an increase in property value over time, and a growing net worth as a cumulative result.
You Are Paying Yourself
Purchasing a house helps you build equity. To figure out your equity in your house, subtract your loan’s principal balance from the market value of your home. For example, if your home’s fair market value is $256,000, but your remaining principal balance is $125,000, you have $131,000 ($256,000 – $125,000) in equity. This equity is available to you as collateral for major expense loans for financing your child’s college education, renovation projects, or paying off credit cards.
The value of most purchased items does not increase over the period of ownership. On the other hand, a home is an investment that is likely to appreciate in value. A home’s value gains over time based on local real estate markets and the improvements made to it. If you decide to sell your home, you will could make a profit if the house value at time of sale is greater than the initial purchase price.
Low Initial Investment
Buying a house may appear to be a scary financial jump. Luckily, you do not need to use all of your savings to purchase a house. You can become a homeowner with just a low percentage (determined by credit and financial factors) of the home value needed for the down payment. While your regular payments are paying down the balance over time, the value of your property is probably rising. A short time into your investment, you will have a home that is worth more than what you paid for it at the time of closing. This equity gives you more financial security and an increase in your net worth.
Are You Ready To Own?
Buying a home can be stressful, but it doesn’t have to be that way with Benchmark. When you feel ready to purchase a home, find your branch. A loan officer will match you with the best loan for your financial needs.
Buying a home can be stressful, but it doesn’t have to be that way. When it’s time to buy a new home, give me a call or apply now. I’ll work with you to find the best loan type for your financial needs.
Buying a home can be stressful, but it doesn’t have to be that way. When it’s time to buy a new home, contact us or call your loan officer. We work with you to get the best mortgage for your financial needs.