Every June millions of Americans celebrate National Homeownership Month. Homeownership has long been regarded as a key component to achieving the American Dream, which is why we have a month dedicated to promoting homeownership and the benefits it entails. Whether you’re a current homeowner or hope to be one in the future, we can all relate to the deep desire to find the perfect home in the perfect community, so let’s take a closer look at homeownership and everything it represents.
What is National Homeownership Month and why is it important?
National Homeownership Month is a time to celebrate the American dream of owning your own home. For home buyers, this is a chance to learn about the many benefits of owning a home. For home sellers, it's an opportunity to brush up on the latest trends in the housing market. Owning a home has long been a key part of living the American dream, and for good reason! It helps build equity and create stability for you and your family, as well as carries cultural and financial significance in American society.
If you're considering buying or selling a home, be sure to take advantage of National Homeownership Month and all it has to offer. There's no better time than now to get started on your homeownership journey!
The Benefits of Owning a Home
One of the first steps in purchasing a new home is determining whether homeownership is the right fit for you. Understanding the benefits of homeownership can make the decision to purchase a home much easier.
- Consistent monthly payments: Homeownership comes with monthly long-term payments that provide peace of mind and stability to owners.
- Possibility of gaining equity: One of the most significant benefits of homeownership is the opportunity to accumulate equity. The longer you own a home, the more you will contribute to the principal balance of any liabilities, such as a mortgage. As you pay down your mortgage and reduce the amount you owe, the value of your home increases, just as the value of your savings account increases with interest. If you own your house long enough, you’ll get back every dollar you paid out and more when you sell.
- Renting is more expensive over time: The initial cost of purchasing a home is significantly higher than paying monthly rent; however, owning a home is less expensive than renting long-term. When comparing a rental property to the monthly mortgage of a comparable home in most cities around the world, the cost of ownership is typically much lower.
- Owning a home provides tax benefits: Owning a home provides homeowners huge tax advantages. Buyers who understand important real estate tax tips realize that owning a home provides major tax benefits.
- Ownership pride and community involvement: Owning a home gives many buyers pride not only in their home but also in their community. It's more difficult to establish relationships with neighbors, local politicians, and local community service employees, if you rent rather than own a home.
The American Dream of Homeownership
Homeownership has long been recognized as a key component of the American dream, as it provides homeowners with several economic benefits, such as the ability to accumulate wealth by accessing credit, building equity, and lowering housing costs.
Even though the majority of Americans want to be homeowners, they face several common obstacles, such as difficulties in saving a sufficient down payment, crippling levels of student loan debt, and the ability to access credit. In addition to these financial obstacles, the current real estate market boom is imposing additional constraints.
The American dream of homeownership is something that many people aspire to fulfill and while achieving this dream can seem out of reach for many, there are several ways to make homeownership more achievable. One way is to save for a larger down payment. Although it may take more time, this will reduce the amount of money that needs to be borrowed and can help to lower monthly payments. Another way is to look for more affordable housing options, such as townhomes or condominiums. Finally, it may be possible to qualify for government assistance programs that can help with the cost of a down payment or monthly mortgage payments. By taking these steps, the American dream of homeownership can become a reality.
Tips For First-Time Home Buyers
It's exciting to be a first-time homebuyer! But it can also be overwhelming. Even though you may be eager to buy, make sure you don't jeopardize your financial goals.
Homebuying is worthwhile if done correctly, which means purchasing a home that you love while not risking your future financial goals. Let's look at some helpful tips for making your life as a new homeowner more enjoyable and secure:
- Create an Emergency Fund
Make sure you have a three-to six-month emergency fund in place before purchasing your first home.
When you have a large emergency fund, you'll be able to cover large expenses that could arise after you move into your new home.
- Determine Your Housing Capability
Before you become emotionally attached to a house, look at your monthly budget to see how much you can afford. Remember that property taxes and homeowner's insurance will impact your monthly payment.
- Save for a Down Payment
It is recommended that you save a minimum of 20% of the purchase price for your down payment. Anything less than 20% will require you to pay for private mortgage insurance (PMI), which protects the mortgage company should you miss payments and go into foreclosure. PMI typically costs 1% of the total loan amount, and you will be charged that 1% each year.
- Put Money Aside to Cover Closing Costs
Closing costs must be paid in addition to your down payment. Your lender will provide you with a specific number, so you know exactly how much you need to bring on closing day.
- Receive Loan Preapproval
Preapproval demonstrates to sellers that you are a serious buyer, which is an excellent way for first-time homebuyers to get ahead in a competitive market! Your lender will verify your financial information and submit your loan for preliminary underwriting to get you preapproved.
- Make a Competitive Bid
Ask your agent to assist you in ensuring that your offer is not only competitive, but also fits within your budget and the home's value. In a competitive market, a personalized letter may help your offer stand out among multiple bids.
- Get Ready for the Closing
The closing process will begin once a seller accepts your offer. Keep things running smoothly by understanding what to expect when purchasing a home. A real estate agent will schedule the remaining steps, from the home inspection to the final walkthrough, and will keep you updated on any issues that arise.
The Importance of Maintaining Your Home
Once you have moved into your new home, maintaining it becomes your responsibility. Not only are you responsible for the monthly mortgage payments, but also maintaining the property itself. This includes everything from fixing a leaky faucet to repainting the exterior of the house. While it may seem like a lot of work, maintaining your home is important for several reasons. First, it helps to protect your most valuable investment. By keeping your home in good condition, you can be sure that it will hold its value over time. Second, regular maintenance can help to prevent serious problems from developing. For example, if you catch a small leak in the roof and repair it right away, you could avoid having to deal with major water damage down the road. Finally, maintaining your home is an effective way to keep it comfortable and inviting for you and your family.
Resources For Homeownership Education and Support
Homeownership is a major financial and life decision, and it is important to be as prepared as possible before taking the plunge. Fortunately, there are a variety of resources available to help educate and support potential homeowners. The federal government provides several helpful programs, including the Homeownership Counseling and Education program, which offers free or low-cost counseling services. In addition, many lenders offer first-time homebuyer programs that can provide financial assistance with things like down payments and closing costs. With a little research and planning, anyone can find the resources they need to make informed decisions about homeownership.
National Homeownership Month serves as an important reminder of the many benefits homeownership brings to individuals, families and communities. It’s a time when we can all come together to celebrate the American dream of owning our own home and reflect on how we can work together to make it more attainable for everyone. If you are looking to buy your first home, be sure to reference our tips to help make the home buying process as smooth as possible. And once you own your home, do not forget to keep it in good condition so you can enjoy all the benefits for years to come!
Home inspections are an important part of being a new homeowner. With WIN Home Inspection, you can rest assured that any problems with your home will be found and dealt with before they become bigger issues. We highly recommend getting your home inspection done as soon as possible after purchasing your home. Discover more with a WIN Home Inspection specialist near you!