Purchasing a home is an excellent avenue to build wealth, but many anticipate roadblocks as first-time investors. Despite these hurdles, buying a home is still achievable. Potential buyers have access to many resources to get over the roadblocks often encountered when trying to invest in property. Additionally, there are plenty of incentives for prospective home buyers to enter the housing market and start accumulating wealth in the market.
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Owning a home yields greater benefits than renting
Owning your own home increases stability and helps build equity. Renting does not. Renters are subject to annual rent increases, whereas homeowners are locked in with a fixed mortgage rate – paying the same amount each month, year after year.
A homeowner’s most valuable asset is equity and is the best long-term approach in building wealth. Paying the loan and decreasing its balance each month increases the homeowner’s equity in their home. Therefore, homeowners get to invest all this money into their own wealth, rather than the wealth of a landlord. Once the mortgage is paid off, the property and its full value is for the owner to cash in on.
As you own a home, the property value may increase over time—as we’ve seen in the hot Phoenix market over the last few years. Thus, the money you spend now in mortgage payments can eventually be cashed out for an even higher dollar amount when you sell the house.
Resources to help guide potential homeowners are plentiful
Trying to navigate the current housing market alone can be hard on your own. Resources such as mortgage lenders and home buyer assistance programs are available to provide guidance. Lenders can offer an extensive range of mortgage loans and personalized experiences; thus, homeowners can decide what loan is best for them.
Home buyer assistance programs are also another excellent resource for those struggling through the process. Down payment assistance, closing assistance, government-backed loans and home buyer education programs are just a few resources available. The Federal Housing Administration (FHA) aids buyers through its FHA loan program in which buyers’ loans are insured, giving them lower down payments and closing costs. Online educational programs are accessible for those wanting to learn more about loan options and the buying and mortgage application process. These are typically free or offered at a low price.
If you desire to build wealth, utilize the aforementioned resources to make your dreams come true. They can make home buying achievable and less daunting.
Author: Rich La Rue is the Designated Broker for HomeSmart Phoenix, the flagship brokerage operation in the HomeSmart system. For more information, visit www.richlarue.com.