What Homebuying Advice Do Boomers Have for Millennials and Gen Z? Insights and Tips for Today's Buyers!
It is daunting task to buy your first home. You have to save the money for downpayment and closing costs. Check your credit score. You are renting generally and you must coordinate timing of your lease expiring and moving into your new home. Search for that new home.... Sounds crazy. Let me put it in perspective, it is much easier than HERDING CATS.
I bought my first home in April 1988. It had taken some time to save up and find a home. I did choose to buy a duplex. Live in one half and rent out the other side. Back then my rate was 9.375%, a deal at that time. The rent income paid for 2/3 of my mortgage. It was the start of building personal wealth through Real Estate.
As the next generation starts "adulting", Millennials and Gen Z borrowers should consider buying their first home now for several reasons. Homeownership can be a valuable tool for building wealth and financial stability over the long term. Here are some key points to consider:
Equity and Appreciation: Owning a home allows you to build equity over time. As you make mortgage payments, a portion goes toward paying down the principal balance, increasing your ownership stake in the property. Additionally, real estate has historically appreciated in value over the long term, providing an opportunity for capital gains.
Forced Savings: Buying a home is a form of forced savings. Instead of paying rent, you are investing in an asset that can grow in value. By consistently making mortgage payments, you are building equity and creating a financial safety net for the future.
Tax Benefits: Homeownership often comes with tax advantages. Mortgage interest and property tax payments can be tax-deductible, potentially reducing your overall tax liability. These deductions can be particularly beneficial during the early years of homeownership when interest payments are typically higher.
Stability and Control: Owning a home provides stability and a sense of control over your living situation. You can personalize and modify your home according to your preferences, and you don't have to worry about rent increases or eviction notices. This stability can be particularly important for Millennials and Gen Z who desire stability and a place to call their own.
Leverage and Investment Opportunities: Homeownership can offer opportunities for leveraging your investment. As you build equity in your home, you can potentially use it as collateral for other investments, such as starting a business or purchasing additional properties. Real estate can be a powerful asset class for diversifying your investment portfolio.
Rising Rental Costs: Rental costs have been rising in many areas, and this trend is expected to continue in the coming years. By purchasing a home now, you can lock in a mortgage payment that may be more affordable than rental payments, especially over the long term. This is a big concern today as rents rise across the country.
Low Interest Rates: Currently, interest rates on mortgages are relatively low. (YES THEY ARE!!! Ask your parents or grandparents what mortgage rates were in the late 1970's and early 1980's) This means that borrowing costs are reduced, making home ownership more affordable. Taking advantage of these low rates can save you a significant amount of money over the life of your mortgage.
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Building Generational Wealth: Homeownership can play a crucial role in building generational wealth. By owning a home, you have the potential to pass down an asset to future generations, providing them with a foundation for financial security and opportunities.
Lastly put a plan in place to own your home free and clear as soon as you can. I can help you develop a plan to achieve this goal.
It is important to note that homeownership also comes with responsibilities and costs, such as property taxes, maintenance, and insurance. (aka ADULTING) Additionally, the decision to buy a home should be based on your personal circumstances, including your financial readiness, job stability, and long-term plans. Reach out to me to discuss your individual situation to help you make an informed decision about homeownership.
To Your Success!!!
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