One common question we get is this: Is buying a house a good investment? It’s a complicated question to answer without knowing any specifics about the person asking and their financial situation, but in most cases, yes it is a good investment. If you have good credit, are financially stable, are planning to stay in the same location for 3-5 years, and possibly have a little money saved, then we’d have to change our answer to definitely.
Luckily, it seems like most American households are on the same page as us. According to a recent survey by Keeping Current Matters, the majority of households believe that owning a home is a good investment.
Buying stabilizes your budget.
One reason buying a house is a good investment is because rent is always increasing. With a fixed-rate mortgage, you know what your monthly payments are going to be for years into the future, which allows you to better budget your money.
We’ll give a local example. Say you were to purchase a $200,000 home in Omaha this year. Depending on the specifics of your loan and the home purchased, you could expect to pay around $1,446/mo. Now, if you were to rent a place for $1,446/mo instead, in just 9 years your rent may increase to around $1,858/mo. Whereas, had you purchased a home, your monthly expenses would have remained relatively the same.
Buying forces you to save money every month.
You’ve probably heard the phrase that when you’re paying rent, you’re just paying someone else’s mortgage. That phrase is fairly true because when you pay rent each month, you don’t get anything back except a place to live.
When you pay a mortgage each month, part of your mortgage payment goes to the principal balance of the loan. With each month, your equity increases helping you to build wealth.
Whether buying a house is a good investment or not depends largely on your unique situation. The team at Mortgage Specialists would love to provide you with the information needed to make that decision. If you’re considering purchasing a home, but aren’t sure if you’re ready, fill out our online application. It usually takes less than 10 minutes and in a few hours, you’ll be on the phone discussing your options with us. We look forward to hearing from you!