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Why Own Your Own Home?

For many of us, owning our home is the "American Dream", a goal we set when we are young, and a place to put our money for long term growth. For others however, owning a home seems out of reach, too much responsibility or too scary. Of course, economics play the biggest role in home ownership so not everyone can afford to buy but I always encourage those that don't think it is possible to sit down with a loan officer before writing off homeownership. Maybe you need to clean up your credit, save $1000 a month, or lower your "dream home" expectations. Saving for a home may mean making some lifestyle changes and there is no doubt that it can be hard but keep these things in mind. It may be worth it!

  1. Owning a home can reduce longevity risk. Renting a home when you retire on a fixed income can be a risk because you can't control rent hikes over time. As a homeowner, even if you have a mortgage, you control your fixed payments, not the landlord.

  2. Owning a home allows you the freedom to paint walls, remodel and do the things you want to do. If you rent, the landlord has the last say.

  3. When you own, home prices can soar or collapse, but you’ll be insulated. Since you are neither buying nor selling your home, who cares what the housing market does?

  4. If you do have to sell, generally, housing prices incline over time so as long as you haven't refinanced multiple times or intend to sell quickly, you will probably see an equity gain due to appreciation. (Housing prices can go down as they did in 2008-2012 so just like the stock market, long term investments can help you weather the storm)

  5. With today's low interest rates, money remains fairly cheap so now could be the right time to buy. Interest rates are averaging around 3.77% (30 year fixed-C-Net). In comparison, in 1980, average interest rates soared to 13% and in 2000, they were averaging around 6.25%. If you have cash in the bank, you are probably earning less than a quarter percent so if you have sufficient reserves, home ownership might be a good way to use your money.

  6. Finally, if you are able to buy your home with cash, way to go! No mortgage, just taxes and insurance. Having more of your money packed in your home is a way to shelter it from federal and state asset-income taxation.


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