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3 Advantages To Owning A Home And How To Shop For One

There are many benefits to owning your own home, and it can be an exciting and rewarding experience but for those who are indecisive here are three reasons why you should consider buying a home:

  1. Owning one will save you money

  2. Money doesn’t limit you from buying and keeping

  3. It’s yours, no questions asked

Owning A Home Saves You Money

When the average person hears the word “house,” they envision something large and expensive, and it’s easy to believe that “owning a home” is reserved only for the wealthy. This could not be further from the truth. Owning a home not only saves you money, it puts you in a position to build wealth. How? For starters, instead of paying rent, pay yourself by saving money for emergencies, vacations, and other expenses.

A paid-off house has no equity, but there is a peace of mind that comes from knowing you don’t owe anyone or have to pay rent, and that type of equity is better.

Consider this:

In the United States, the average monthly rent for an apartment is $1,400. That works out to $16,800 per year to just to live somewhere. And the average cost of purchasing a home is $300,000, with a mortgage of around $1,400 per month. So, if you had a mortgage instead of paying rent, by the time your mortgage was paid off, you'd own a house and pay only home insurance and yearly property taxes. It's comparable to the majority of  people owning a car, which is much better than worrying about security deposits and paying real estate agents.

Buying When You Don't Have Enough

Majority of homeowners put down payment of 20% or more in order to get a home loan. So those with less money become leery on the possibility of owning a home but there's no need worry because there are a few options for those with financial limitations.

The first option is to use a gift for the down payment. The gift can be from an immediate, marital or adopted family member, friend, charity, your employer, government agency, or labor union. There is no amount restriction on how much you can receive in a gift. The only requirement is a documented formal letter with a honest paper trail.

This letter must state:

  • Dollar amount given

  • Date funds were transferred

  • Address of property being purchased

  • The gift giver relationship to the gift recipient

  • The gift giver’s account information

  • Note that specifies that this is a gift is not a loan, and will not be repaid.

All parties must sign the letter, date it, and keep the bank teller deposits receipts, mobile deposit receipts are not accepted. Without an official formal gift letter and a proper paper trail of funds being deposited and transferred to and from accounts, you can be rejected when submitting a cash gift as a down payment. Here is a template that can help.

The second method is to get a government backed loan. Government loans are built for people who don’t have a lot of financial resources available. With a government backed loan the down payment is low and the remaining amount gets written off when the contract is up. There are only three types of government housing loans available. They are USDA loan, VA loan, and FHA loan.

USDA — The United States Department of Agriculture government loan is a mortgage that is backed by the United States Department of Agriculture. This loan is available to eligible low income homebuyers who are looking to purchase a home in a rural area. It is designed to help owners afford to purchase a home, promote homeownership in rural areas, and offers a number of benefits to eligible borrowers. For example, the USDA government loan program offers 100% financing, which means that eligible borrowers can finance the entire purchase price of their home without having to make a down payment. Additionally, the interest rates on USDA government loans are typically lower than the interest rates on conventional loans.

Simple requirements for this loan are:

  • 640 credit score

  • Two year employment history

  • Income below 115% of area median income

  • Debt to income ratio can’t exceed 41%

  • Must purchase a primary single family home residence located in eligible rural area

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VA Loan — The VA loan is a mortgage program created by the U.S. Department of Veterans Affairs (VA). This program allows qualified veterans and active-duty service members to purchase homes with no down payment and lower monthly payments. As a veteran, you can get a VA loan with no down payment, low closing costs and flexible financing terms. There are two types of VA loans: refinance loans for borrowers who already have a VA mortgage or purchase loans for buyers who want to use the benefit for their first home purchase. The VA only guarantees 3 percent of the loan amount on certain home loans made by private lenders so lenders often require borrowers to make at least a minimum down payment as well as closing costs, which can include title insurance, appraisal fees and prepaid interest.

Simple requirements for this loan are:

  • 580 — 620 credit score

  • Two year employment history

  • Served eligible military service

  • Debt to income ratio must not exceed 41%

  • Must purchase a primary one to four unit home residence

FHA — The Federal Housing Administration government loan program helps homebuyers with low incomes or poor credit scores obtain financing. The program is available to both first-time homebuyers and repeat buyers, and it offers a number of benefits, including low down payments, flexible credit requirements, and competitive interest rates. FHA loans are insured by the government, which means that if the borrower defaults on the loan, the government will pay the lender. This makes FHA loans a good option for borrowers who may not have the best credit or who may not have a large down payment. FHA loans are available for both purchasing and refinancing a home.

Simple requirements for this loan are:

  • 580 credit score

  • Two year employment history

  • 3.5% down payment

  • Debt to income ratio can’t exceed 45%

  • Must purchase a primary one to four family home residence

It’s Yours So Try To Pay Off Mortgage Early

If you have a mortgage, there are many advantages of paying off your mortgage early. The main important advantage is that you will have one less monthly bill to worry about, and lots of extra cash on hand. The average American household spends approximately $1,200 per year on interest. If you pay an extra $500 a month towards your mortgage each year, it will decrease the amount of interest you pay by about $12,000 over the life of the loan.

And if you don’t have mortgage congrats, just keep up with your home taxes and enjoy it!

How To Find The Perfect Home

The first thing that you need to do is to set a budget. The price will vary depending on where you live, so think about what you can afford and what would be best for your family or yourself. Do you want a single-family house? An apartment? A condo? Or something else entirely?

A home is an expression of who you are and how you want to live. So you should probably find one that suits your lifestyle and health. Make sure you consider the neighborhood, schools, hospitals, commute and inspections on the building. is one website that will show the stats on noise levels, nearby locations, flood level and more.

There are other websites and apps that can help you find a home quicker such as Zillow, Redfin and the official real estate listing for the state you reside in or seek to reside in. For example in the state of New York the website is OneKeyMLS. Hiring a real estate agent from an agency like The Agency is also helpful.

So if you’re trying to decide between renting or buying a home, we hope this article has given you some food for thought.

Read more of our “House and Home” articles.



Written By The Resource Manual

The Resource Manual publishes resourceful articles on the topic of personal, health, love, finance, well-being, and business. Our goal is to provide valuable resources to help others navigate through life more smoothly.

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