There are several factors to consider in today's market when buying a home. Whether you're a first-time buyer or you've bought and sold homes before, it's essential to weigh the pros and cons of any property purchase before you make a decision.
Ready to learn more about these pros and cons? Keep reading!
Pros of Buying a Home
Begin building equity.
When you buy a home, almost everyone starts with a mortgage. Each month as you pay towards your mortgage, you earn equity which is like your "share" of the home. Equity is essentially your financial stake in the house.
In Colorado, the value of your home will likely continue to increase, and you can use that equity as a source of income by taking out a home equity loan or refinancing down the road. Home equity is one of the best ways to build your wealth, as the options are endless when you are the owner!
You will not have to worry about rent increases or lease agreements.
Especially in Denver, you will likely save money in the long run by owning your home. With rent increasing significantly all over the Denver Metro, paying rent means paying someone else's mortgage. Another huge benefit to not renting is that you can customize your home to your preferences, which is not always possible when renting.
Interest rates are still historically low... for now.
Interest rates are predicted to increase in late 2022. While this is no surprise to anyone, there is no better time to buy and lock in an interest rate than now. Rates are still historically low compared to even just five years ago.
Madison & Company Properties partnered with Move Up Mortgage to analyze how much waiting to buy could cost buyers. In the end, it could cost you up to $70,609 just because of increasing interest rates! Want more information on this? Reach out to me today, and I'm happy to talk more about rates, the market, and how you can put yourself in the best financial position when buying your home!
Cons of Buying a Home
The market may change.
The market may go up or down after you buy your home – so it's essential to be flexible and prepared for any potential changes. Nobody knows for sure what the market is going to do. However, it's safe to say that we are FAR from a housing bubble. Colorado homes are maintaining and increasing value. While real estate is cyclical, the talk of a "housing bubble" is far from true, especially in Colorado.
It's a big commitment.
A home is a big purchase – and it takes work to maintain. When you're renting, your landlord takes care of all the repairs and fixes the home needs. Sometimes it's just nice not to have that responsibility. I understand that! However, simple budgeting can ensure that you're ready for any regular maintenance needs or emergencies that might present you as a homeowner.
The market is competitive.
You may have heard of buyer burnout. In Colorado (especially the Denver Metro), there is no way around the exhaustion of house hunting. It can be exhausting as we are in a very competitive market. You'll have to be flexible with your list of needs and wants, possibly your location, as well as your budget. However, the best tool you can have on your side is an experienced Madison REALTOR®, like me! Knowing the market is crucial, but negotiating is vital to writing up a winning offer. So, if you're hesitant about buying a home, chat with me about how we can make this a positive experience even in a competitive market!
To Sum it Up:
Buying a home may be the best investment you can make for your future. If you're considering buying, but you still have some hesitations, then shoot me an email. I'd love to chat with you on a more personal level to understand how I can assist you in this unique Colorado real estate market. For those of you who currently own your home and you're thinking now is the time to make a move, reach out to your Madison Realtor for a free home value analysis!