You Might Be Ready To Buy Your First House (And Not Even Know It)
To buy or not to buy? That's the question!
As you prepare to enter the world of adulthood, one of your first responsibilities will be securing a place to live. Renting may seem like the obvious solution for now, and it may not be a bad one. However, if you rent for too long and don't ever buy a place of your own, you may find yourself stuck in a cycle that is difficult to escape. Arrowhead Title, Inc. is here to help educate you on this dangerous cycle and how you can avoid it.
Starting Out
When they first start out on their own, most young people choose to rent apartments, townhomes, duplexes, small houses, or condos rather than plunging straight into the world of homeownership. In many cases, renting initially is wise. Most young adults plan to move several times within the first few years of their lives before settling down on a place to call home. Since it usually takes a minimum of three years for the cost of continued rent to outweigh the initial cost of buying a home, renting is often the cheaper solution for young adults who do yet know where they want to end up.
The Renter's Trap
While renting initially may be well and good, if you choose to rent for an extended period of time, you risk being caught in what is commonly called "the renter's trap." Let's suppose that you plan on buying a home in three years. In the meantime, you plan to continue renting so you can save up for a down payment. Unfortunately, your landlord increases your rent every single year, making it harder to save. The three years come and go, and you aren't much closer to your savings goal. You decide to rent for another three years so you can keep saving up, but inevitably, your rent goes up yet again, making it even more challenging to save...
You get the picture. People find themselves in the renter's trap when they want to buy, but the financial pressure from renting prevents them from taking the leap into homeownership.
Avoiding The Trap
Steadily rising rent prices are the primary reason people fall into the renter's trap. While it may be impossible to predict when and by how much your cost of rent will increase, you can be quite confident that it will rise at some point (and potentially multiple times).
The best way to avoid getting caught in the renter's trap is to begin saving to buy a house as soon as you can - possibly several years before you plan to buy a home at the Lake of the Ozarks. Even if homeownership seems like a distant dot on the horizon, discipline yourself to start setting money aside now. After all, building a nest egg is never a bad thing!
Educate Yourself
The other important thing you can do to avoid falling victim to the renter's trap is to educate yourself. Many young adults unknowingly confine themselves to the renter's trap simply because they do not know the true requirements of buying a house.
Though providing a 20% down payment was a practically non-negotiable component of buying a house several years ago, it isn't anymore. However, many people fail to realize that homes can often be purchased for down payments as low as 5% or less. Credit score requirements for mortgage loans are also dropping, according to a recent article published by Keeping Current Matters. For these (and other) reasons, homeownership is becoming much more accessible to young people who wish to buy a home. Unfortunately, many people assume that the requirements have not changed much over the past few years, and consequently may resign themselves to the renter's trap unnecessarily.
Before you assume that you are not in a financial position to buy a house, talk to a mortgage lender to find out what the actual requirements are. It's possible that you may already have everything you need to buy your first home.
Arrowhead Title, Inc. Is Here To Assist With The Transaction Process
We're to support you in your quest to avoid (or free yourself from) the renter's trap. If you are preparing to take the plunge and buy your first house, we hope you'll consider our Lake of the Ozarks title company to facilitate your transaction. We have worked with countless first-time buyers, and we understand the unique needs of these transactions.
Visit us at www.ArrowheadTitle.com to learn more about our Lake of the Ozarks title services and how we may be able to help you.
The Lake of the Ozarks' Most Trusted Title Company
Where Accuracy Matters!
As you prepare to enter the world of adulthood, one of your first responsibilities will be securing a place to live. Renting may seem like the obvious solution for now, and it may not be a bad one. However, if you rent for too long and don't ever buy a place of your own, you may find yourself stuck in a cycle that is difficult to escape. Arrowhead Title, Inc. is here to help educate you on this dangerous cycle and how you can avoid it.
Starting Out
When they first start out on their own, most young people choose to rent apartments, townhomes, duplexes, small houses, or condos rather than plunging straight into the world of homeownership. In many cases, renting initially is wise. Most young adults plan to move several times within the first few years of their lives before settling down on a place to call home. Since it usually takes a minimum of three years for the cost of continued rent to outweigh the initial cost of buying a home, renting is often the cheaper solution for young adults who do yet know where they want to end up.
The Renter's Trap
While renting initially may be well and good, if you choose to rent for an extended period of time, you risk being caught in what is commonly called "the renter's trap." Let's suppose that you plan on buying a home in three years. In the meantime, you plan to continue renting so you can save up for a down payment. Unfortunately, your landlord increases your rent every single year, making it harder to save. The three years come and go, and you aren't much closer to your savings goal. You decide to rent for another three years so you can keep saving up, but inevitably, your rent goes up yet again, making it even more challenging to save...
Avoiding The Trap
Steadily rising rent prices are the primary reason people fall into the renter's trap. While it may be impossible to predict when and by how much your cost of rent will increase, you can be quite confident that it will rise at some point (and potentially multiple times).
The best way to avoid getting caught in the renter's trap is to begin saving to buy a house as soon as you can - possibly several years before you plan to buy a home at the Lake of the Ozarks. Even if homeownership seems like a distant dot on the horizon, discipline yourself to start setting money aside now. After all, building a nest egg is never a bad thing!
Educate Yourself
The other important thing you can do to avoid falling victim to the renter's trap is to educate yourself. Many young adults unknowingly confine themselves to the renter's trap simply because they do not know the true requirements of buying a house.
Though providing a 20% down payment was a practically non-negotiable component of buying a house several years ago, it isn't anymore. However, many people fail to realize that homes can often be purchased for down payments as low as 5% or less. Credit score requirements for mortgage loans are also dropping, according to a recent article published by Keeping Current Matters. For these (and other) reasons, homeownership is becoming much more accessible to young people who wish to buy a home. Unfortunately, many people assume that the requirements have not changed much over the past few years, and consequently may resign themselves to the renter's trap unnecessarily.
Before you assume that you are not in a financial position to buy a house, talk to a mortgage lender to find out what the actual requirements are. It's possible that you may already have everything you need to buy your first home.
Arrowhead Title, Inc. Is Here To Assist With The Transaction Process
We're to support you in your quest to avoid (or free yourself from) the renter's trap. If you are preparing to take the plunge and buy your first house, we hope you'll consider our Lake of the Ozarks title company to facilitate your transaction. We have worked with countless first-time buyers, and we understand the unique needs of these transactions.
Visit us at www.ArrowheadTitle.com to learn more about our Lake of the Ozarks title services and how we may be able to help you.
The Lake of the Ozarks' Most Trusted Title Company
Where Accuracy Matters!
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