The Financial Advantages of Buying a New Home

Jun 27, 2015
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With recession and falling interest rates, people have started to wonder whether it is really feasible to invest in a new home at all. It is not their fault. With so much negative written in the newspapers and on the media, it is easy for any person to think that investing in a property is not attractive any longer. Many think that it is better to wait and watch until things clear up a little. That’s understandable, especially if you are planning to buy a house for the first time. I bought my house years ago, and after a few years of appreciation of its value, it started to stagnate and lately the prices are actually falling. But all this does not dishearten me any more and I am certain that I did not make a mistake by buying my house when I needed it. Just imagine, you are buying a house with a small down payment. It may be a fraction of the total cost of the house, may be only 10% of its value. Rest of the amount is invested by the bank that provides you with loan. So if you buy a house worth $50000, you are in effect shelling out only about $5000 and the rest you need to pay in easy monthly installments. Even if the property gains only about 2-3 % in a year, it offsets all the interest you pay on the principal amount. This means that your investment is safe and sound and you have made no mistake by purchasing the house.

Apart from the monetary angle, you cannot live in your bank account, do you? Or can you hope that your shares and investment in the market will give you a shelter? Never, and this is the additional benefit of buying a house as you get to live for free in the house which otherwise you may have to pay as rent.

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