Karen Lawley's Blog
Many people shy away from this topic; they think it’s something way out of their league. Deciding to buy a home requires a lot of planning and saving, it’s not a decision made over the night. Remaining a tenant is not bad especially if you can’t afford to buy a house just yet. However, deciding to stay a tenant forever without any plan to get your property is not a great idea.
Buying a house and continuous mortgage payment especially during the first year is capital intensive, but over time, you would begin to enjoy the benefits of the decision to buy. Living as a tenant has its advantages; however, becoming a homeowner has more advantages. Below are reasons why you should buy rather than rent.
Allows You Save Over Time
When you become a homeowner, the word ‘forced to save’ comes to play. For you to be able to make your monthly mortgage payments, you would keep a certain amount aside which would go into your home. Economically, this is a wise decision as it helps you build ROI and equity unlike when you pay for a rented apartment.
Becoming a homeowner gives you a sense of balance and security. If you decide to get married or if you are already, owning a home eliminates the burden of moving from one location to another. When you become a homeowner, your kids grow up in a stable and secure environment.
Freedom Of Activities
Living in rented apartments limits what you can do. Many landlords have rules they put in place to keep their property running smoothly. When you decide to take a mortgage, it gives you the freedom to customize your space the way you like; it allows you to decorate, you can choose to invite guests over or even get a pet.
Allows You To Get A Second Stream Of Income
Deciding to take a mortgage allows you the opportunity of having a second stream of income. The property is yours, and you can choose to let out a room, rent out the garage, rent out a part of your yard or your driveway. The whole idea is that you can monetize your property without having to report to anyone.
The Cost Of Mortgage Remains The Same, Unlike Rent That Increases
Fixed mortgage rates do not increase irrespective of the economic position. Landlords are not bothered about if you got a salary increment or not at your job; they typically tend to increase the cost of your rent yearly. Paying for your mortgage is settling the bulk of your housing payments which helps you attain budget stability.
If you are in doubt about which decision to make (rent or buy), speak to a real estate agent today to help you assess your readiness to own a home.
Personal financial in your twenties comes with a steep learning curve. One minute you’re studying for your finals and the next you’re expected to suddenly know about APR financing, 401(K)s, and fixed-rate mortgages.
If you’re in your twenties and are facing these new challenges, you’re probably equal parts terrified and excited for the future. And, although it can be anxiety-inducing to step into the world of personal finance, you have one tool to your advantage that your parents and grandparents didn’t have: the internet.
So, in this article, we’re going to give you some tips about buying a home and managing your finances in your twenties.
Have an emergency fund
You probably have a lot of things you want to save for. Down payments on mortgages and auto loans, saving money for traveling, beginning your retirement funds, and maybe even starting a family; they’re all important investments that will take time and financial planning to achieve.
However, one thing that many young people neglect when they first start saving is an emergency fund. There are any number of things that can throw a wrench in your plans in your twenties. You might lose a job and have to live off of savings while hunting for a new one. Maybe something goes wrong with your car and it costs hundreds to repair. Or, you could have unforeseen medical expenses that aren’t covered by your insurance. Regardless of the reason, having an emergency fund will help you stay out of unnecessary debt.
It’s recommended to have at least 6 months of living expenses saved in your emergency fund. Once you have this amount saved, it’s a good idea to keep it in a separate account to avoid spending it on things that aren’t exactly an emergency.
Don’t live above your means
We all know that buying a house, going to college, and even buying groceries are all exponentially more expensive than they used to be. However, it’s still important to try to adjust your lifestyle to the things you can afford.
This includes the vehicle you drive, the first home you buy, and even smaller purchases you make.
Avoiding lifestyle creep
Related to our last point about living above your means, lifestyle creep is the phenomenon that occurs when you get a raise or a higher paying job: the more we make, the more we spend. However, it’s possible to avoid this trend by keeping your finances in check.
The next time you get a raise, make sure that money is put to use in either your retirement fund or savings account. This method is based on the goal of “giving every dollar a job.” When every dollar you earn has a purpose, you’re less likely to spend it on new video game consoles every six months.