Five Reasons Why Homeownership is a Good Idea

It can be expensive to rent a house or apartment, but when you’re ready to buy your first home, you’ll likely face another significant cost—a down payment. Before you start searching for your dream home, take a moment to consider the benefits of homeownership and whether it’s really the best choice for you and your family. Here are five common reasons why homeownership makes sense for most people.

Five Reasons Why Homeownership is a Good Idea

Forced Savings

Challenges For First-Time Buyers

Owning your own home means that you have to be committed to making it work. You will likely have to deal with a number of challenges as well as expenses that are specific to homeownership. These challenges can be overwhelming for first-time buyers, but if you follow some simple tips and ideas, it can make the process much easier.

  1. Save up money for your down payment: The most common challenge for first-time buyers is saving up enough money for their down payment. If you want to buy now and don't have much saved up yet, start planning now. Start by saving $200-$400 each month until you reach your goal; this will take about two years on average. Once you have reached your goal, divide the total amount into monthly payments so that you will only need to save an additional $100-$150 each month.
  2. Get pre-approved for a mortgage loan: Another challenge may arise in trying to find out how much house or condo you can afford. Before looking at properties, get pre-approved for a mortgage loan from your bank or lender. Having proof of income from both partners combined with a financial advisor's opinion on what size property to purchase will help alleviate challenges in the process; however, many other challenges will arise during homeownership. One such challenge is having enough space for all your belongings. If you live near a school district, good public schools can also present challenges when deciding where to live because these schools often attract families who may not be willing to sell their homes no matter what price they are offered. Other challenges include maintenance of the property, which includes caring for lawns and yards (mowing lawns), painting exterior walls (primer coat then paint), roof repairs/replacements (two-coat roof paint), carpet replacements (wool carpet pad with a non-slip underlayment). 

The last challenge we'll mention is finding extra time for yourself after owning a home--since there are never any weekends!

Tax Deductions

What are the Challenges for First-Time Buyers? One of the most challenging aspects of being a first-time home buyer can be coming up with the funds for a down payment. The FHA, VA and USDA loan programs allow buyers to put down as little as 3.5% for homes that cost less than $271,050 in metropolitan areas or $200,000 in non-metropolitan areas. There are also many other programs to help first-time buyers overcome these challenges.

Build Equity

Building equity in your home can be challenging for first-time buyers. You have to make big monthly payments, and you're also paying the interest on the loan while you're doing so. In addition, homeowners pay property taxes, homeowner's insurance and other fees that renters don't need to cover. 

It's important to keep these challenges in mind when deciding if homeownership is right for you. It might not be what's best for everyone at this point in their life.

Stability and Predictability

Most people don't know that the first step in the home-buying process is to create stability and predictability by developing an emergency savings fund. This should be six months' worth of your income, and it's best if you have this money in a low-risk vehicle like a savings account. Now, let's say you're ready to take the next step towards homeownership. Challenges for first-time buyers include coming up with a down payment, which will likely be 10% of the purchase price. The good news is that there are still plenty of programs out there that offer down payment assistance or zero-interest loans.

Pride of Ownership

Buying your first home can be an exciting time in your life. It's a big responsibility, and you'll need to take care of the house like it's your own. That said, most homeowners love their homes and experience pride in ownership. First-time homebuyers often worry about what challenges they will face as new homeowners. 

Fortunately, there are many challenges that first-time buyers face when purchasing their first home and plenty of resources out there to help them through the process.