There is no denying that purchasing a home is one of the largest financial expenses you will ever make. But could investing in a home enhance your financial profile? The answer to that question is yes. Following are a few different ways that investing in a home can potentially improve your financial situation.
1. You can make money by selling your home later at a higher value.
The most obvious way that spending on a home can enhance your financial situation is by serving directly as an investment asset.
If you buy low and sell high with real estate on a consistent basis, that can bring quite a bit of money into your account.
2. If you own two homes, you can rent one out.
If you already own one home, buying a second home or vacation home gives you a resource which you can rent out for extra income.
If this is your first home purchase, you might eventually end up purchasing a second one, in which case you’ll have a rental property available.
Many people also choose to rent out a room in their primary residence for extra income.
3. Investing in a home forces you to save money in the form of equity.
Purchasing a home has another benefit for borrowers who have a difficult time saving money.
In a way, investing in a home is like a forced form of savings. The savings take the form of equity rather than cash. But even though they lack the liquidity of cash, you still have them to fall back on if necessary, in the long run (see below).
4. Someday you can lean on your equity with a reverse mortgage.
If you own 50% or more equity in your home by the time you become a senior citizen, you may qualify for a reverse mortgage.
If you are eligible for a reverse mortgage, you can borrow against your equity.
The resulting loan does not need to be paid back until a maturity event such as the sale of the house or the death of the last borrower.
The cash you receive through the loan is yours to use without restrictions of any kind.
So, that is how you can make those savings liquid again if you need more money during your retirement years.
If you were to rent rather than buy a home, you might not save all about money in the form of equity and might not have the option of improving your quality of life so dramatically later down the line.
5. The right mortgage can help you consolidate high interest debt.
Another benefit of taking out a mortgage which many people overlook is the chance to use your home loan for consolidation purposes.
If you are paying on high interest debts right now, you may be spending more money then you need to.
If you take out a mortgage or refinance one and consolidate those high interest debts into your home loan payments, the low interest rate which applies your mortgage will also apply to those other debts.
Additionally, you will have fewer debts to keep track of and you are less likely to miss your payments. That means you are less likely to fall behind again.
Purchase a Home, Refinance, or Apply for a Reverse Mortgage Now in Florida
We have now gone over some of the financial benefits of investing in a home.
Whether you are applying for your first home loan, are looking to refinance an existing mortgage, or are wondering if you qualify for a reverse mortgage, Premier Lending Corp can help you to achieve your financial goals now and in the future.
To schedule your consultation today, please give us a call at 954-840-8811. We look forward to assisting you with all your Florida home loan needs.