As of March 2016, the average price for a U.S. home was $186,000. While that’s not insanely expensive, it’s also not the kind of purchase you can make with a single payment. That’s why mortgages exist, and why they’re so important. But can mortgage planning benefit you in the future? Keep reading to find out.
Mortgage Doesn’t Affect Home Value
Buying a home is very different than buying a car. Unlike automobiles, which depreciate immediately after being taken off the dealership lot, a home will usually increase in value over time. Fortunately, a mortgage won’t interfere with that at all. Your home’s value will increase without a mortgage, so there’s no harm in having one. Having a mortgage simply allows your equity to grow simultaneously to your home’s value.
More Bang for Your Buck
A mortgage is arguably the least expensive bank loan you’ll ever have to take out. Loans are given out based on the lender’s confidence in the party borrowing the money. The more capable you are of repaying your loan, the better your interest rate will be. and if you’re offering a whole house as collateral, you’re practically eliminating any risk your lender might have faced before. If the loan falls through, they get the house. If you can effectively pay the money back, they get their investment back. Essentially, this is a win-win situation for the lender.
Payments Remain Static
Mortgage payments may seem like a tough sell when you initially purchase a home, but they will get easier over time. For example, a homeowner who took out a mortgage 20 years ago is still paying the same amount every month that they were at the time of their very first payment. Mortgage payments don’t increase, but incomes generally do. The longer you build up home equity and pay your mortgage back, the easier it will get.
Don’t Forget to Plan Ahead
Whether you think you’re prepared for home ownership or not, every first time home buyer should see a mortgage broker to plan for the future. A conventional mortgage may get easier over time, but mortgage planning should always take place before a home is purchased. This way, you’ll know exactly what you’re in for.
Need help planning your mortgage? Don’t hesitate to contact the experts at Platinum Lending Solutions today.