Today I want to clarify a point made in an earlier video regarding the benefits of homeownership—specifically, down payment assistance.
Looking for a home? Click here.
Selling your home? Click here.
Last time, I discussed some of the benefits of homeownership, including the existence of down payment assistance programs available to homebuyers. One of my listeners didn’t clearly understand what I meant there, so today I want to follow up with that topic to provide some extra clarity.
Since, with down payment assistance, you can have your down payment paid for, as well as your closing costs, it may be in your best interest to buy a home as opposed to renting one.
The listener told me he’s paying $1,250 a month in rent for a 3-bedroom, 2-bath home that’s 1,400 square feet. He said, “If I buy a house, I’ll have to pay for insurance and taxes, as well as do all the upkeep. I can just write one check now, and the owner of the property has to take care of all that stuff.”
If he can get his down payment and closing costs covered to buy a home, why not do that?
That’s true, but there’s another side to consider:
If he is paying $1,250 a month for rent, that equals $15,000 a year. If he lives in that house for 20 years and his rate doesn’t increase, he will have paid $300,000. But the house he lives in is not worth $300,000!
He also has two kids and one more on the way, which means he may soon need a bigger home; a bigger home would be similar in payments to what he’s paying for rent now. If he can get his down payment and closing costs covered to buy a home, why not do that?
Hopefully, this provides you with additional information to help you understand the true value that comes from homeownership. If you have any further questions, don’t hesitate to reach out to me. I’d love to speak with you.