As the year approaches its end, uncertainty concerning the fate of the housing market continues to loom around the corner. Claims of imminent recession linger at the forefront of every homeowner’s mind, and people with aspirations to buy their own home are constantly faced with unfavorable reports and data. Many would argue now is not the time to buy a home — but you’d be surprised to discover why buying a home soon still makes sense. There are many reasons to start buying, especially if you’re financially prepared and committed to the major undertaking of buying a new home. Here are five reasons why it actually makes sense to buy now rather than later.
Increase your home equity and return on investment
You hear it everywhere — people lamenting the skyrocketing prices of today’s market. Little do many know that rising prices actually benefit home equity and your future return on investment. As prices rise, so does the value of your property, even as the steady increase in prices is set to slow and stagnate. For example, let’s say you buy a home for $800,000, but within the next year or so, the market value of your property increases to $950,000. With that increase, you have gained $150,000 in equity. A fraction of your monthly payments called the mortgage principal also goes toward increasing your total home equity.
What exactly is home equity good for? Homeowners can use their equity for a number of things, such as a home equity line of credit (HELOC), a home equity loan, a down payment for a new property, and a cash-out refinance.
HELOCs
A HELOC grants you a loan equal to 80-85% of your home’s market value, which you are free to use as you see fit. You don’t have to withdraw the full amount, and you only pay interest on the amount you borrowed, not the entire percentage. Keep in mind that interest rates are variable and are thus subject to change according to the market.
Home equity loan
The opposite of a HELOC, a home equity loan grants you up to 85% of your home’s market value as a lump sum amount. You must pay interest on the total amount and repay the entire loan within your loan term. Home equity loans are a good choice because the interest you pay is at a fixed rate as opposed to a variable interest rate.
Down payment for a new property
If you’re interested in upgrading in the future, the equity you build on your current home can be used as a down payment on your new home. A small, less expensive home is a good way to build equity in preparation for upgrading to a larger, more lavish one.
Cash-out refinance
If you want to refinance your existing mortgage, consider a cash-out refinance. A cash-out refinance grants you up to 80% of your home’s market value and replaces your existing mortgage with a larger one, netting you a sum of money that is the difference between the old and new mortgage.
Fixed-rate mortgages stay the same throughout the loan term
Selecting a fixed-rate mortgage guarantees that your monthly payments and interest rates remain the same throughout the loan term, even as your home’s market value increases. The security of a fixed-rate mortgage is one of the reasons why owning a home is arguably the best way to accrue generational wealth. Consider that renting does not offer the benefits of a fixed-rate loan, and both payments and interest rates are always subject to change. It’s no wonder homeownership is highly preferable over renting, especially amid rising prices and interest rates in today’s market.
Homeownership affords more benefits than renting
Aside from providing the option for a fixed-rate loan, homeownership lends itself to more flexibility and benefits than renting does.
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You are free to customize and renovate your property as you desire (in accordance with local rules and regulations). Rental units don’t typically allow any sort of customization aside from furniture and may even charge you for minor damages.
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The privacy of a single-family home is unmatched. Renting usually subjects you to dozens of noisy neighbors in a single building.
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As mentioned above, homeownership opens up the world of home equity and its many benefits.
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Financing a mortgage and paying your bills on time will increase your credit score, giving you the chance to build a better credit rating.
Favorable housing markets in Columbus
There is a small inventory of properties currently available in Columbus that would make for a great investment opportunity in the current market. German Village and Short North are two promising neighborhoods in the Columbus region that all prospective buyers should deeply consider. Take a look at how these markets currently fare.
German Village
Houses for sale in German Village, Ohio, are currently valued between $350,000 and $2,900,000, with lower-end homes having at least two bedrooms and one bathroom. These are great prices in a fantastic area, but they are subject to increase in value as inventory runs out.
Short North
As for homes in Short North, Columbus, Ohio, market values range between $224,900 and $1,550,000. These options include stunning condos in great locations and gorgeous townhomes with private garages. Inventory is incredibly limited; it’s best to take advantage of these values now.
Work with Wayne Woods to buy Columbus real estate
Overall, the benefit of buying a home now mostly lies in the beauty of home equity. So long as you are financially prepared and committed, there’s little for you to worry about. Make the investment now, and reap the benefits in the future.
To increase the likelihood of securing a favorable deal on a home, reach out to a local real estate agent experienced with houses for sale in German Village, Ohio, and adjacent neighborhoods. Wayne Woods is one such agent, boasting over 12 years of expertise and unwavering devotion to his clients’ goals. He is committed to building enduring friendships, not just partnerships, and helping clients meet their every need. Wayne is an indubitable ally, ready and committed to providing you with the best service and support. Connect with him today!
