How Owning a Home Will Impact Your Finances
There’s no denying that buying a home will shift your bank account, but what do those changes look like exactly?
While the initial investment can sting, most financial impacts of entering homeownership are highly beneficial.
Upfront Costs
Between the down payment and all the bits and pieces of the buying process, upfront costs to buying a home can feel awfully steep. However, many people end up surprised at what they can actually afford, especially after realizing a 20% down payment isn’t really necessary, and upon closer examination of interest rates.
On top of the purchase of the home itself, entering homeownership often comes with the requirement to purchase more furniture, especially if you’re moving from a smaller apartment. Any necessary appliances like washer and dryer that aren’t sold with the house can quickly pile on costs. Plus, maintaining a home often means buying more tools for home and lawn care, in addition to necessitating a bit of a backup savings account for incidentals. A home warranty can sometimes offset the costs of unexpected repairs - but those aren’t free either!
Equity
The all-encompassing benefit of owning a home? Building equity. Instead of paying into someone else’s pocket as we do with rent, paying down the principal of our mortgage means we are contributing to our own equity. In owning a home, it becomes exponentially easier to build wealth and maintain smart financial options.
Ongoing Options
In a pinch, home equity can work almost like a savings account. Of course, it’s a bit less liquid than that, but many famed entrepreneurs were able to start businesses because of their option to refinance their homes and begin with some cash. Home equity is also commonly used to alleviate unexpected financial hardships, like health issues. Ideally, you never have to tap into your home’s equity and can instead use it in your next home purchase, or pass it on to your family in some way.
Generational Wealth
Equity can be passed through generations in many ways. In some families, children inherit their parents’ homes and with them all of the equity that they’d built up. Or, homes are sold in order to help fund retirement and any remaining equity can be passed on to the next generation. But even before that, tapping into equity can be used for investments like college funds or financial support for children’s goals and education.
Investing in a home is much more than investing in four walls. Instead, it’s an investment in family, in freedom of choice for the future, and for financial security down the line.
Ready to live out the life of your dreams in a home custom built just for you? Get started with Atmos today.
