When you go to buy your very first home it is easy to get caught up in the energy. Sure, it is exciting to think that you are making that major step into a lifestyle but, at the same time, that very thought could also be terrifying. After all, it is a big financial commitment and risk.
As such you really need to make sure that you properly evaluate this decision. Indeed, it is not one that you should simply dive into. It will be the biggest financial decision you will ever make; sure, you can always sell your home down the road at some point and then move into another one or change your lifestyle entirely, but you also bear the risk of being at the will of the market.
That is, of course, the great benefit of owning a home: equity. When you buy a home you are definitely investing in your future. If you decide to sell it at some point, you don’t lose the money you already spent. If you upgraded or remodeled your home you can factor that into the sale. If not, though, the mortgage that you have already paid for however many years you have lived there still counts towards the ownership of a home, even if it is another one.
Still, make sure you understand these risks as you are considering the many benefits of TSW Real Estate Group home ownership:
RISK #1: DEFAULT
The biggest risk that you will take on when you buy a home is the risk of default. This is the term used to describe what happens when you simply stop making payments on a debt, which is technically what your mortgage is. If you stop paying for a long enough period of time and you don’t work out some options with your bank, you reach a default status and that can ruin your financial statement.
RISK #2: OBSOLESCENCE
Many people plan to buy a starter home and then move into something bigger later. It is a smart strategy for couples looking to build a family and who might be at the beginning of a career but planning to advance in the future (and can therefore afford a bigger house). But what happens if it comes time to sell and the market is not doing so well or your home is not among the more desired models or styles or in a desired neighborhood?