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Homeownership Is a Key to Building Wealth

November 20, 2020 By Claire Garlick Leave a Comment

For years, real estate has been considered the best investment you can make. A major reason for this is due to the net worth a household gains through homeownership. In fact, according to the 2019 Survey of Consumer Finance Data from the Federal Reserve, for the average homeowner:

…a primary home accounts for 90% of the total wealth of a family in the U.S.

How do homeowners gain wealth?

Most large purchases, like cars and appliances, depreciate in value as they age, so it’s understandable to question how owning a home can increase wealth over time. In a simple equation, the National Association of Realtors (NAR) explains how the combination of paying your mortgage and home price appreciation grow overall wealth:

Principal Payments + Price Appreciation Gains = Housing Wealth Gain

As home values increase and you make payments toward your home loan, you’ll gain wealth through equity. The same article from NAR also addresses how wealth gains tend to play out over time:

Housing wealth accumulation takes time and is built up by paying off the mortgage debt and by price appreciation. And while home prices can fall, home prices tend to recover and go up over the longer term. As of September 2020, the median sales price of existing home sales was $311,800, a 35% gain since July 2006 when prices peaked at $230,000.

Taking a look at how equity has grown for the typical homeowner, it’s clear to see how real estate is a sound long-term investment. NAR notes:

Nationally, a person who purchased a typical home 30 years ago would have typically gained about $283,000 as of the second quarter of 2020.” (See graph below):

Bottom Line

Whether you’re a current homeowner planning to put your equity toward a new home or have hopes of buying your first home soon, homeownership will always be a great opportunity to build your net worth and overall wealth. Owning a home is truly an investment in your financial future.

Article originally published at https://www.keepingcurrentmatters.com/2020/11/10/homeownership-is-a-key-to-building-wealth/.

Do You Have Enough Money Saved for a Down Payment?

October 30, 2020 By Claire Garlick Leave a Comment

One of the biggest misconceptions for first-time homebuyers is how much you’ll need to save for a down payment. Contrary to popular belief, you don’t always have to put 20% down to buy a house. Here’s how it breaks down.

A recent survey by Point2Homes mentions that 74% of millennials (ages 25-40) say they’re interested in purchasing a home over the next 12 months. The study notes, “88% say they have significantly less savings than the average national down payment amount, which is $62,600.”

Thankfully, $62,600 is not the amount every buyer needs for a down payment in the United States. There are many different options available, especially for first-time homebuyers (millennial or not). That amount can also be significantly less, depending on the purchase price of the house.

According to the National Association of Realtors (NAR), “The median existing-home price for all housing types in August was $310,600.” (These are the latest numbers available). NAR also indicates that:

“In 2019, the median down payment was 12 percent for all buyers, six percent for first-time buyers, and 16 percent for repeat buyers.” (See graph below):

That means if a qualified first-time buyer purchases a home at today’s median price, $310,600, with a 6% down payment, in reality, the down payment only amounts to $18,636. That’s nowhere near $62,600.

Knowing there are also programs like FHA where the down payment can be as low as 3.5% of the purchase price for a first-time buyer, that up-front cost could be significantly less – as little as $10,871 for the same home noted above. There are also other programs like USDA and loans for Veterans that waive down payment requirements.

The Point2Homes study also shares how much millennials have indicated they’ve saved for a down payment. As we can see in the graph below, 39% have already saved enough for a down payment on a median-priced home. Another 47% are close to reaching that goal, depending on the purchase price of the home.

Unfortunately, the lack of knowledge about the home-buying process is keeping many motivated first-time buyers on the sidelines. That’s why it’s important to contact us to understand the requirements in our area if you want to buy a home. Our team and your lender can guide you through the process.

Bottom Line

Be careful not to let big myths about home-buying keep you and your family out of the housing market. We would love to meet with you to help you better understand and plan for your options today.

Article originally published at https://www.keepingcurrentmatters.com/2020/10/13/do-you-have-enough-money-saved-for-a-down-payment/.

Essential Maintenance to Conduct on Newly Purchased Homes

September 22, 2020 By Claire Garlick Leave a Comment

You’ve worked hard to become a homeowner. However, your work is not done. After you move into your new house, there are several essential maintenance tasks that you’ll need to attend to. Here are a few things you need to do in order to maintain your new home:

Gutter Maintenance

Your gutters are an important part of your home. They’re designed to prevent water from damaging the foundation of your home by redirecting the flow away from the base. They’ll also prevent ice dams from forming on your roof by creating a path for the water to flow off of your roof. You should inspect your gutters and clean them if necessary, as gutters can become easily clogged with leaves and branches – and even sustain damage over time if not taken care of. This is an easy fix that many neglect after purchasing a home, resulting in more costly repairs down the road.

Air Conditioner Maintenance

Unless the air conditioner is brand new, you should ensure that it gets maintenance. You’ll need to have the filter changed, since it’s responsible for removing dirt, dust and allergens from the air. A dirty filter will cause your HVAC system to work harder, as well as produce poor air quality.

You’ll also need to have your HVAC system inspected by a professional. They can perform a tune-up. Air conditioner maintenance will help you save money because the unit will use less energy and last a lot longer.

Water Heater Maintenance

Your water heater likely needs to be drained if it’s been used before. Sediment has a tendency to build up in water heaters over time, and few sellers have this taken care of before they sell their home. If the sediment hardens, your water heater will become less efficient. Draining the water heater will help get rid of the sediment and ensure your heater works normally long after you move into your new home.

Plumbing Maintenance

Inspecting the pipes in a property you’ve just moved into is crucial. Look under your sinks to make sure the pipes aren’t leaking. Also, if there are water stains on your ceiling, you may have a plumbing leak. Additionally, you’ll need to check your faucets for drips. If you notice any problems, call a plumber who can ensure that your sinks, toilets and pipes are in good working condition. Plumbing maintenance can help you save a lot of time and money further down the road.

You will need to perform basic maintenance when you move into a home. You’ll need to clean your gutters in order to protect the foundation, as well as perform water heater maintenance and air conditioner maintenance. Additionally, it’s important to make sure your plumbing system is in good shape.

Article originally published at http://blog.rismedia.com/2020/essential-maintenance-newly-purchased/.

Homeownership Is a Key to Building Wealth

How do homeowners gain wealth?

Bottom Line

Do You Have Enough Money Saved for a Down Payment?

Bottom Line

Essential Maintenance to Conduct on Newly Purchased Homes

Gutter Maintenance

Air Conditioner Maintenance

Water Heater Maintenance

Plumbing Maintenance

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