The idea of buying your own home is exciting, but the reality of it can be frightening. Having too much debt, low credit scores and lack of funds are just some of the common causes of home-buyer anxiety, especially among young adults. That fear is likely holding you back from taking the big step to becoming a homeowner as well.
It’s understandable for you to be intimidated when buying a home — it’s a big investment after all. However, even with these valid worries, there are also plenty of benefits that come with purchasing a house.
Read on to know the advantages of being a homeowner at a young age.
It Gives You More Freedom
Most young adults prefer renting an apartment with other people to avoid major expenses. However, sharing your space with someone means you’ll have to compromise and consider their needs and wants around the house. Renting can also prevent you from making your house into a home since changes like landscaping or decorating are subject to the approval of your landlord and your housemates.
Meanwhile, being a homeowner means you’re the one making the rules. You can renovate and customize your home however you wish — no need to ask or wait for anyone’s permission. There will also be less disturbance when you have your own space, especially now that there’s an increase among young adults who prefer working from home.
You’ll Get Better Tax Deductions
Aside from getting the freedom you want, owning a home also gives you several tax breaks that can save you some extra cash and make home ownership more affordable. Some tax treatments that come with having a home include mortgage interest and points deductions; private mortgage insurance; state and local tax deduction; home sale exclusion; and tax credits.
Pay Off Mortgage and Gain Equity Earlier
Many people who buy a home, whether it’s a starter or a permanent one, will take out a mortgage to actually afford it. On average, it could take you about 15 to 30 years to fully pay off that mortgage. It’s understandable for young people to feel intimidated upon seeing how long it’s going to take for them to be mortgage-free.
However, if you purchase a home in your 20s as opposed to your 40s, you will likely be relieved of the largest payment obligation sooner. Additionally, it implies that you’ll be debt-free before or at the time of retirement, giving you the financial freedom to live the life you want.
What’s more, each mortgage payment gives you ownership of a specific percentage of your would-be home — a.k.a home equity. So, the earlier you pay off your mortgage, the earlier you will gain equity and have a real estate property you can call your own.
Helps You Build Your Credit
It’s difficult to build your credit score at a young age. However, paying off the mortgage on your home can help you do so as it shows lenders that you can take significant financial liabilities and settle them responsibly. On-time mortgage payments will also bode well for future purchases such as another home, a car, credit card applications, or personal loans.
Encourages You to Start Saving Early
Mortgage payments are the biggest responsibility you have when it comes to owning a property. Late payments may cause you to suffer penalties such as paying late fees and lower credit scores.
Such consequences will compel you to get your finances in order to ensure you don’t miss any dues. By the time you have a significant income, you already know how to manage your money and prioritize your spending.
Prepares You for the Future
There are a lot of things you will learn when purchasing your first home. The challenges that come with homeownership, from finding the ideal house to preparing for home repairs, offer valuable lessons and a mature perspective that will be useful later in life.
You’ll be more accountable and be a better decision-maker, both of which are vital aspects of being an adult. The earlier you are exposed to the reality of being a homeowner, the earlier you can create the groundwork to ensure long-term stability.
Owning a home will also push you to learn how to do chores such as cooking and cleaning for yourself, doing the laundry, fixing a leaky faucet, and being an all-around handyman.
Even with the benefits listed above, purchasing a home can still be a nerve-wracking endeavor. That’s why it’s important to have a plan and the right tools to ensure that your house hunting experience will be as smooth as possible.
What’s more, starting out young allows you to learn important lessons either through your mistakes or that of others. You can quickly remedy any mishaps and prevent them from happening later in life.
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