The Benefits of Home Ownership As A Millennial
Millennials know better than any other generation that buying a house is a huge commitment of time, energy, and finances. Between the quickly oscillating job market, rising student debt, and a generational desire to travel, millennials are less likely to buy a house in their ‘20s than any other age group. But benefits of homeownership know no age; millennials can find that purchasing a home in their ‘20s can be a very lucrative decision.
Its understandable that, right after taking on the considerable loans that most universities require, structuring a mortgage and budgeting for down payments and closing costs can seem incredibly daunting. But millennials can find comfort in knowing that interest rates on mortgages are at an all time low. In the troughs, it is cheaper to borrow money than it has been in the past (and likely will be for the foreseeable future). For potential homebuyers that have the bigger picture in mind and can qualify for a loan, now is the time to apply.
Millennials can rest easy knowing that their finances are secure in an inflation-protected, physical asset. Homeowners are investing in their future when they structure out mortgage payments instead of living rent check to rent check. Homeowners also enjoy the freedom to customize and renovate their space. From a fresh coat of paint to an extension off the back deck, the improvements you make can increase your happiness now and in the future, when your home’s resale values grows.
To expand on the latter, considering your home’s resale value can save you a lot of time and money in the long run. In your initial search, look to buy in areas where the market is trending up, therefore increasing your potential home’s net worth. The time to think about selling your home is actually the day you buy it. Consider the property’s location, number of bedrooms and bathrooms, storage space (kitchen cabinets, garage, attic or basement), floor-plan, and updates to maximize its resale potential.
Millennials who buy young are likely to have their home paid off by their retirement, allowing them to tap into their home equity; once your home is no longer being used as collateral for the loans taken out to fund it, you’ll experience a substantial pay off upon selling. Homeowners with considerable home equity can use the income from their home to fund retirement benefits as well as supplement their 401(k) and IRA accounts. Your home equity is the most valuable asset that can be used later in life, so a considerable purchase today is an investment for a profitable future.