Financial effects of early home purchase

Source: HomeCapital Website

Some of the most important choices that a young adult has to make are deciding whether to invest in their own home. 'Property finance' is seen as one of today's big investment options. Although renting tends to be the most cost-effective option in the short term, investing in your property is much better in the long run. Here, a prospective buyer with upgrades and facilities will have to think about the value of the property versus the expense of a comparable property in the future. Let us take you through why it's important to consider owning a home and make this decision early on.

1. Increase in rent- Inflation is also a consideration that you should remember when investing your money in something. Although rent will currently be manageable, some factors would more than likely trigger another Global Financial Crisis in the coming years. Also, some cities announced a significant year-on-year rise in average rental yield. So, it makes even more financial sense to invest in your own home early because of inflation and higher rents. Instead of investing it in rent, set your money aside for property finance. In the former case, you're going to have a roof over your head but you're not going to own it, always a precarious position to be in.

2. Many daily expenses relating to rent- There are plenty of extra expenses you can face when you rent out. For one, there are still big security deposits, meaning that if you're renting, you won't be able to tap into that amount of money. Other varying expenses include parking spaces, transportation costs and more. Both of these are to be paid with none of the ownership protection and make no financial sense.

Source: HomeCapital Website

3. Many daily costs are related to buying a home- That doesn't mean there aren't any other costs associated with owning your own house. Even in this situation, there are quite a few expenses. First, repair costs are correlated with problems such as painting, updating other areas, repairs, and more. Then there are also taxes to pay which are to be paid periodically. Then there are also taxes to pay which are to be paid periodically. All this, however, is offset by the comfort of having your roof over your head.

4. Closing costs- Getting your own home means you can incur a variety of final fees from sources such as lenders, third parties and other intermediaries. Such fees are one-time. In the name of stamp duty, property tax, and home insurance such payments would have to be made. Therefore, early investing in your own home and capitalizing on your savings in the purchase of the property would be much wiser. You will then also pay off the closing costs sooner, and then have to think about taxes and upkeep.

5. Many goals to save- For example, if you have other saving goals in your life, investing in a car, or building a fund of your kids' education, then earlier investing in your property would be far more sensible. So earlier leaning to property financing is easier. You could get ownership of your property this way faster. Instead, if you've got a consistent habit of making payments related to buying a house, you can save alongside your other savings goals. Alternatively, you might come into your home early and focus solely on saving to buy the car, appliances or even invest in a fund.

6. Costs for new appliances, chairs or lawn care facilities- When you rent a home you certainly have to invest in building your house. If you switch from leasing to leasing, this may be an expense that is paid several times over. Appliances are required in any home so if you switch houses a lot, this is always a cost incurred. Also, furniture is a must, because if you move a lot, you can pay for furnishing (or at least move your furniture) every time you go to a new location. Nonetheless, this will not be a concern if you spend early on in your own house. In that scenario, instead of a constant expense, the furniture, appliances, lawn care equipment, etc. you buy will be an investment.

As you can see, all the signs indicate earlier buying a home would be a wiser choice. So measure your savings and buy your first home today with HomeCapital's interest-free home down payment assistance. Even if your down payment is higher, this will only mean that you will receive your home possession faster. And then, the world is your oyster and you have so many choices.