Currently renting and not sure whether to buy? Here's 5 reasons why buying your own home makes sense
Still renting? Ever thought about buying your own home? It may be hugely costly in the initial instance, but you will be better off in the long term. House prices have been rising significantly over the last few years, particularly in the South East and while interest rates are so low, maybe now is the best time to do it! Here’s 5 reasons why we think it makes financial sense…
1. It will appreciate in value
If you put your money into a bank account you will never be able to make as much money as you would if you put your money into property. Property is an asset that appreciates along with inflation, where as no bank account will offer you interest anywhere near the rate of inflation.
2. Financial security
Having your own home means you can have security and peace of mind. From avoiding uncontrollable rent increases to the worry of being displaced when the landlord decides to kick you out, having your own place gives you security and stability. Taking out a fixed rate mortgage (where the repayments will always be the same over a fixed period) means you can easily plan and budget and often works out cheaper than monthly rent payments.
3. It’s easy to add value
From refreshing some tired paintwork to adding a loft extension, there are plenty of ways to add value to your home. Think carefully about what would be the best option for extending or renovating. For example, if you add an extra ensuite would it add as much value as an extra bedroom? Whether you are doing it yourself or paying a builder to complete the work, do plenty of research before you start. Then sit back and enjoy the fruits of your labour… and get your house valued by an estate agent!
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4. You can’t lose
At the moment it is a good time to buy because interest rates are low. Even when the rates start rising you’ll still be in a good position if you own your own home. Depending on the type of mortgage you have i.e if you have a repayment mortgage rather than an interest only mortgage – you are actually paying off the loan on the house. Even though it sounds obvious, it means that when you pay a repayment mortgage each month you are not only paying off your mortgage, but also adding to the equity (as the property price is going up).
5. You can borrow against it
Years down the line, as your house gains more value, you will have more and more equity in it. This means that if you ever need money for improvements, an extension or a new business venture you have a way to raise funds quickly and fairly risk-free.