If you're a first-time homebuyer or simply worry about being able to afford a down payment on a home, you're not alone. Reaching the suggested 20% down payment mark can be a tall task, and seem like an insurmountable obstacle to some. If you live in the St. Louis or St. Charles area, you no longer have to worry about finding enough money in your budget to put down a healthy down payment for a house you're interested in buying.
Can you go to an open house without an agent? Yes. But there are many implications to consider if you choose to tour a home without a licensed agent to represent your interests.
You don't throw away money on rent
As you make payments on your mortgage, you generate equity from your home. Equity is the value of the house that you truly "own." The more money you spend on your home, the more money you accumulate through equity. The equity you have is considered capital or a financial asset. As the value of your home increases, so does your capital.
For example, if you purchase a home for $150,000, you could put a $20,000 down payment on the house. This means that you will get a $130,000 loan and have $20,000 equity in the home. Once you reach 20% equity in your home, you can apply for a home equity loan or refinance your mortgage to seek a lower interest rate. A lower interest rate means you will pay less in the long run. When renting, you don't see these same financial benefits because you don't own the property. You simply pay the monthly fees that the landlord requires.
You can have a fixed mortgage cost
When renting, landlords have the power to increase renting costs every year by large or unexpected amounts. With a fixed-rate mortgage, you can be sure that your payments won't increase year to year. Even a 3% increase in rent over 10 years will significantly increase your fees. You can be confident that your mortgage will stay the same if you decide to buy a home instead.
It can be scary to commit to making a payment for 15-to-30 years. A fixed-mortgage can take some of the stress away by ensuring your payment won't change even if your income does. Buying a home can actually take away some of the uncertainty that you might see when renting. Remember when we talked about equity? A fixed-mortgage rate pays off principal and interest at the same time. So, as you pay off the principal, you are increasing your equity (or capital).
It's your property!
It's a great feeling when you buy a home. To call a property your own is a great accomplishment. When you buy a house, you don't have to worry about what rules the landlord might want you to follow. You have the right to create a home that fits your lifestyle, and the only person you have to answer to is yourself!
As a homeowner, your property becomes a clean slate. You can turn your property into anything you want! Anything from painting walls, landscaping, and renovations are fair-game when you own a house. You have the freedom to turn a house into a "home," and it can be exactly how you want it. When renting, you don't have the same luxuries and freedoms that come with owning a home. Typically, you have to gain permission from your landlord to make any changes and are often shot down. Being a homeowner allows you to make the property into anything YOU want.
Potential tax benefits
Homeownership is so good for the economy that the federal and state governments reward individuals who own properties and pay interest on a mortgage. Some homeowners can deduct the interest they pay on their mortgage from their taxes. This is unique to homeowners because renters don't pay a mortgage; therefore, they don't get any tax benefits.
Sometimes you have the option to deduct property taxes up to a certain amount as well. These benefits vary depending on your location and personal situation. Still, you definitely won't have these options if you rent.
You get the community experience
Buying a home helps connect you to a specific neighborhood and community. Renters tend to live in different houses or apartments after a year or two. Also, if you live in a rental area, you may see different neighbors moving in and out all the time. As a homeowner, you can put down roots in your community and build relationships with people in your neighborhood. You can get involved in your local community by volunteering, throwing block parties, or helping at the local school. Buying a home can help create more vibrant, fuller relationships with your community and a gives a stronger sense of home.
We know the idea of owning a home can be stressful. It’s always important to consider the factors unique to you and your needs. If you feel like you’re ready to make the jump to buying a house, HomeTraq can help you find your dream home!
Homeowners who find themselves around the home more than normal can use time to make a big difference in their home with upgrades that don’t have to cost a fortune. Simple DIY projects can enhance a home and make spaces more appealing for buyers when homeowners are ready to move forward with their home sale.
St Louis Region Escapes the Housing Crisis of 2020
Despite what the news media may imply, the pandemic and protests HAVE NOT severely damaged the St. Louis area real estate market. Home Showings are increasing as the stay-at-home orders are lifted. Sales Prices continue to rise as the number of Homes for Sale sinks to historically low levels. Additionally, Homes Under Contract are similar to Sold Homes during the same timeframe last year. Scroll down for more local housing info & stats and check out current for-sale, recently sold and open houses in your neighborhood.
Owning a home is more than having a permanent address. By investing in a home, you build financial stability, gain the freedom to create a home that fits your lifestyle, and play a role in strengthening your community!
There’s little doubt that COVID-19 has changed our lives significantly over the last days and weeks. There has been so much information released as a result of these unprecedented times that it’s been hard to keep up. To keep things clear, and to help you sift through all the information you’re getting, we wanted to provide a resource so you can better understand recent legislation enacted to help homeowners impacted by the COVID-19 pandemic.