First Time Home Buyers Archives | Page 12 of 100 | Blessings Realty

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/.

New Construction or Existing Home: Which Is Better for Your Family?

August 19, 2020 By Claire Garlick Leave a Comment

Are you in the market to buy a home? If so, then you may be trying to decide between new construction or purchasing an existing home. With your home being such a huge purchase, you need to be sure you make the best choice for your family.

Here are some things you should consider when trying to determine whether new construction or an existing home is better for your family:

Your Budget

The biggest deciding factor for many individuals is their budget. Existing homes often come with a cheaper initial price tag; however, there may also be some incentives for purchasing a new construction home that can make them more affordable in the long run.

Whether or Not You Want to Make Repairs

Existing homes usually have repairs that need to be made. Things may break more often than you think, and fixing them requires time, energy and money. Some individuals are handy and don’t mind making a few repairs here and there, while others don’t want to deal with the repairs and maintenance often associated with existing homes. Most new construction homes won’t need to have repairs made to them in the immediate future. If the home is well made, it may be years before any repairs are needed.

Future Insurance Premiums

Many individuals don’t realize that new homes tend to have lower insurance premiums. This is because they’re seen as less of a risk to insurance companies than existing homes are. It’s not uncommon for some homeowners to pay hundreds of dollars more in insurance premiums each year simply because they purchased an existing home instead of new construction.

The Importance of Energy Efficiency

Existing homes typically aren’t anywhere near as energy efficient as new construction homes, which can often lead to larger electric bills each month. There are some updates you can make to improve the energy efficiency of an existing home, but it takes more money and effort. New construction homes are usually built with the most energy-efficient materials available, which can be very beneficial to the buyer and the environment.

If you’re in the market for a home, you need to consider all of your options. This includes determining whether or not you should choose an existing home or new construction. Many choose a newly built home because they’re more energy efficient, have low insurance premiums, don’t require repairs and fit into the buyer’s budget. By keeping this all in mind, you can make the right decision when it comes to which type of home will meet your family’s needs.

Article originally published at http://blog.rismedia.com/2020/new-construction-existing-home-better/.

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

New Construction or Existing Home: Which Is Better for Your Family?

Your Budget

Whether or Not You Want to Make Repairs

Future Insurance Premiums

The Importance of Energy Efficiency

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