Buying a home might have a bigger impact on your financial future than any other decision, so it is vital to know how the home buying process works. You will need to obtain a home loan, also known as a mortgage, and you typically provide a down payment and pay closing costs. Down payments vary depending on the type of home loan you receive and the amount of the home, but usually buyers spend between 3% and 20% of the home’s price on a down payment.
What are the benefits to owning a home?
One of the biggest direct benefits of owning a home includes having a consistent, long-term amount of money that you spend every month on housing. The cost of renting a home often fluctuates when the local or national economy changes.
When most people talk about why they should buy a home, building an investment is often one of the first things mentioned. With home ownership, the amount of money you pay every month is helping increase your investment in the property, with the eventual goal of owning the home outright. So after you have paid off your home loan, the home is yours to continue to live in – without paying a monthly mortgage or rent – or to sell.
The government provides certain tax benefits to those that purchase or own a home. If you are thinking of buying a home, then you should consult your tax advisor for additional information.
Buying a home is a big commitment. Be sure to do your research and check with financial professionals, like a reputable mortgage lender, financial investor or accountant, before you start shopping for homes or applying for loans.
WhiteBoard Finance provides a comprehensive video on the process: