The truth about homeownership
As your real estate resource Cervone, Deegan knows that taking the leap from renting into homeownership involves some important steps but may not be as out of reach as you think. From cash on hand to a good credit score you will want to be in a position to make this move, but there are other things to consider as well as some myths to clear up about the process. Here are some items to set the record straight.
Homeownership means a lot of debt
Some people believe that having a mortgage means you will be incurring a lot of debt. While needing to pay your mortgage regularly may be correct, homeownership has some big advantages. As you pay your mortgage down every month you essentially will begin to gain equity. This can almost act as like a savings account in some ways. You can potentially pull out equity down the road and use it towards other things, or cash out when you sell. Owning a home and building equity is often a factor in one’s retirement plans.
20% Down is mandatory
This is often the thought of many because if you put down less than 20% then you will be required to pay private mortgage insurance or PMI on top of your regular payment. Many people do this and put as little as 5% down on some properties and just have to pay a small monthly fee until their home has more than 20% equity in it. In the end it is a small price to pay for being able to own a home sooner than later.
Credit score must be perfect
The better your credit score, the easier it will be to secure a lower interest loan but there are mortgage programs that have lower credit and income requirements that you can take advantage of. It is worth mentioning that once you do secure a home loan this can overtime help you improve your credit ranking as well.
Now is not the time to buy
If it is a buyer’s market or if rates are very low like they are these days, then it can be a great time to buy a home. If you are financially ready to buy and if it is time to upgrade your home then these factors will play an important role in timing as well. Nobody has a crystal ball to know what will happen tomorrow, but if you are well prepared then it is the right time to make a move.
It will be hard to relocate
Some people think they don’t want to buy as they will be stuck in that home. First, it is most often suggested to view a real estate purchase as at least a 3 year investment. This can help you weather any market twists while you get a sense of your new space. Should the market remain healthy, you can potentially sell much sooner than that as well or consider renting out the home if necessary.