HOME OWNERSHIP MATTERS
BY GARY KELLER
Jun 16, 2017
Fear #1: I can’t afford to buy a home now.
Fact: Actually, you can’t afford not to buy a home.
The truth is, there is always a home you can afford to buy that will be a smart purchase for you. Rule of thumb – if you’re paying rent, you can buy. From a financial point of view, in the United States, the tax savings on a mortgage interest alone usually make up most of the difference between rent and a mortgage payment. Finally, the earlier you buy, the earlier you will benefit from equity buildup and will be well-positioned for any future appreciation. The sooner and more seriously you begin the process of buying your home, the sooner you’ll find the best buy for you.
Fear #2: I should wait until the real estate market gets better.
Fact: There is never a wrong time to buy the right home.
Historically, focusing on the market is never the same approach as buying the right home. Whether right means the right price or the right property for you, waiting to time the market seldom works to your advantage. Trying to find time in the market in the short term is the easiest way to miss your timing for the long term. Keep in mind, it’s the long-term factors that make real estate a solid investment. All you need to do in the short run is find a good buy and make sure you have the financial ability to hold it in the long run. While you should always be aware of the fluctuations of local market conditions, real estate tends to be much more stable and rewarding over time than any other type of investment.
Fear #3: I don’t have money for a down payment.
Fact: There are a wide variety of down payment options available for you.
While many people believe that making a home purchase requires a substantial down payment, as much as 20 percent, this is seldom true. As a first-time buyer, options are always available to you that require much less than this number, some as low as 5 percent, some even less. Don’t let the lack of a substantial down payment prevent you from investigating your home-purchasing opportunities. And by the way, delaying your purchase will mean delaying all the financial benefits of homeownership. In other words, we think waiting could actually cost you money.
Fear #4: I can’t buy a home because my credit isn’t very good.
Fact: A less-than-perfect credit score won’t necessarily prevent you from buying a home.
Typically, there are two types of credit challenges – a poor credit history or no history. First, while it’s valuable to have a good credit store, a poor one shouldn’t prevent you from talking to several lenders to explore your options. You might be pleasantly surprised at the outcome. You can expect that a good loan officer (or mortgage specialist) will be able to help you resolve your credit challenges, often by simply showing you how to consolidate your debts, or by referring you to a credit counselor who will put you on a plan.
Fear #5: I can’t afford to buy my dream home.
Fact: The best way to get closer to buying your dream home is to buy your first home.
Very few people can afford to buy their dream home when they buy their first home. So you make compromises, buy your first home and start building equity. This approach takes you further and faster down the road to being able to own your dream home than if you hadn’t purchased a home at all.
Fear #6: I should wait to buy a home until I get married.
Fact: There’s no reason to wait.
When most people say they want to wait until they’re married to buy their first home, what they’re actually struggling with are two distinct issues: First, would it be better to wait until they had two incomes? And second, will my future spouse like the home I choose?
If marriage is not in your future, then neither of these issue matter and buying IS the right decision. Get in the game as soon as possible. By the way, if marriage is in your future and if your future spouse doesn’t like your home, you can rent it or sell it and use the proceeds along with your possible dual income to buy one you both like. If your spouse likes the home, problem solved!
Fear #7: Buying a home seems way too complicated.
Fact: Buying a home is way too complicated, but that’s why you have help.
No one would ever tell you that buying a home is easy. It’s not. That’s why there is a team of professionals who are ready to guide you through the home-buying process every step of the way. From your real estate agent to your mortgage officer to the professional who handles your closing and everyone in between, these experts make a complex process simple for you!
"Those who have the most fulfilling lives base their decisions on facts, not fears."
– Gary Keller