Economists confirm that homeowners, on average, accumulate more wealth than renters. By paying down their mortgage on a monthly basis, part of every payment goes to the principal and the value of their asset (house). Homeowners also have the flexibility to improve their property to better suit their needs and to increase its value over time.
Renting Doesn't Always Mean Money Saved
A commonly held belief is that renting results in a lower monthly housing payment. While this may be true, studies show that more often than not renters do not save or invest those excess funds. Rather, they spend the excess money on discretionary consumer items.
Homeownership Is Attainable
Although it may appear a daunting task, buying a home has never been easier. Once a person has secured a consistent, reliable source of income and has established a good credit history, homeownership becomes very feasible. With many programs available today, a prospective homeowner may only need to accumulate three to six percent of the purchase price.
As a rule of thumb, a mortgage payment should not exceed 28% of your gross monthly income, and your credit score should be above 700. The final piece of the puzzle is the down payment. A down payment can be obtained by various means, such as: savings that you have accumulated, borrowing from your 401k, or a gift or loan from family.
Homeownership equals independence and stability. No more depending on roommates who may come and go, or landlords with ever increasing rent payments. We have at State Bank to help answer all your questions and shepherd you through the process.