Buying A Home Could Make People Wealthy

Buying A Home Could Make People Wealthy

Buying a​ Home Could Make People Wealthy
With the​ real estate market slowing, many potential homeowners and​ investors are worrying that they missed the​ boat .​
But it's not too late.
According to​ David Bach, author of​ the​ best-selling the​ Automatic Millionaire Homeowner: a​ Powerful Plan to​ Finish Rich in​ Real Estate, buying a​ home is​ still a​ wise move.
We're seeing home ownership become accessible to​ more people, says Bach.
But owning a​ home isn't for​ everyone .​
Those that don't want the​ expense of​ maintaining a​ home and​ the​ commitment it​ involves may consider continuing to​ rent .​
The renter is​ able to​ move quickly and​ has little responsibility in​ the​ long run .​
And they have less of​ a​ financial interest in​ the​ property.
If you are convinced that your area is​ still in​ a​ housing bubble that will start to​ go down soon, you might consider waiting to​ purchase until conditions are more favorable to​ you.
If you have doubts whether owning or​ renting is​ best for​ you, you should consider all of​ the​ costs, pros and​ cons and​ long term consequences.
One pro that is​ rarely brought up is​ the​ net worth of​ a​ homeowner .​
American homeowners have a​ median net worth of​ $184,400, while renters are worth $4,000, according to​ the​ National Association of​ Realtors.
For most people, it​ truly is​ their best asset, their most valuable asset, Bach says of​ homeownership.
People work their whole lives and​ save, save, save, but buying a​ home and​ living in​ it​ will make them more money than anything else they do.
Bach suggests to​ ask yourself some questions before making up your mind.
First, how much home can you afford? the​ basic rule from the​ FHA is​ that your total housing costs, including mortgage, insurance and​ taxes, should not exceed 29% of​ your gross income .​
Your total debt, including credit cards, alimony, child support, student loans and​ car loans, should not exceed 41%.
Then ask where you will find the​ money .​
Mortgages come at​ a​ cost.
You have to​ find some money, says Bach .​
You can't borrow everything .​
But you can go in​ with pretty little .​
With $2,000 to​ $5,000, in​ many communities you can afford to​ buy a​ house.
Finally, look at​ ways to​ save money after buying .​
Look into the​ total cost of​ the​ mortgage .​
Bach recommends cutting that cost by paying your mortgage off early.
You can do this by paying biweekly, instead of​ monthly .​
Or simply add an​ extra payment to​ each year, for​ a​ total of​ 13 payments .​
This could cut your mortgage by years.
Bach says the​ average person can save between $50,000 and​ $100,000 on their mortgage by simply looking for​ ways to​ save.
That's a​ lot of​ money, he says.

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