Being a homeowner is a big part of the American dream, isn’t it?
A part of the Declaration of Independence states “that among these are Life, Liberty and the pursuit of Happiness” & becoming a homeowner is certainly a pursuit of happiness.
Being a homeowner is an outward reflection of the fruits of our labor; something of our own with which we can improve, change and build assets value over time.
Most people have a financial goal of buying a home one day but life factors can discourage us from becoming homeowners. Here are two of my favorite quotes that speak to the discouraged:
- Patience is a Virtue by Prudentius
Being diligent and purposeful with your money and credit will eventually reward you with the opportunity of becoming a homeowner. Stay disciplined and keep your focus on the big picture. - Knowledge is Power by Sir Francis Bacon
Strive to educate yourself about the buying and building process in the area that you want to be a homeowner. It is never too early to start investigating these options. It will only better help you prepare and make a more educated when it is time to decide.
Once you have a few things in order, such as having steady employment and making sure your credit is where it needs to be, your next steps are deciding if you want to Buy or Build:
| BUYING | |
| PROS | CONS |
| Making upgrades will increase your home’s value, which means higher profit for you when selling. | The home will have its quirks and you will likely discover other things you weren’t aware of when you bought it. |
| Living in the home allows you to save and make upgrades over time which is easier on your budget. | Upgrading the home can be very costly and time consuming. Older appliances may need to be replaced soon, etc. |
| There is normally no wait time before moving in, you get immediate access to the property. | You are limited to changing the structured layout. For example, you can’t tear down a weight baring wall if you want an open concept living area. |
| You can research and know the neighborhood, property values, etc. | Making the home your own isn’t cheap. Cosmetic changes such as paint, wallpaper, wood flooring, all cost and take time as well. |
| You physically get to see the layout of the home, so you can visualize living there much easier. | Homeowners insurance can be higher for a pre-owned home. |
*In June 2015 the average purchase price in the United States for a pre-owned home was $ 280,200.00 which also included the cost of land*
| BUILDING | |
| PROS | CONS |
| If you research or ask, you can get builder’s discounts on supplies such as lumber and fixtures. | Building a home isn’t fast. It can take up to four to six months on average. Maybe even longer before you are able to move in. |
| There are no hidden “issues” which will require costly upgrades because everything will be new and you know you shouldn’t have to replace them for at least 10 years. | You may have to arrange a temporary living situation such as renting or staying with a friend or family member during the build. You may have to pay for storage for your belongings as well. |
| New appliances are typically more energy efficient, which means lower cost monthly on heat, air, etc. | Your home plan could be limited by your price range which could mean you have to choose a smaller home with low end appliances, hardware, and fixtures. |
| There are no remodels or cosmetic changes. The home is exactly the way you want it from the start. | Building can be complicated & more expensive than you initially thought if you do not understand the legal agreement with your builder upfront. Getting legal consult is highly encouraged, but another additional cost. |
| New home designs are typically more spacious with more common areas for family and entertaining. | You may have to obtain the loan initially if your builder doesn’t carry the financing. This means you have to ensure everything meets building codes and your builder has the necessary permits. You may need to hire an inspector which is another expense not factored into the build. |
*In 2015 the average construction costs for a New Home were $289,415.00 (on average $ 103.00 per square foot), which did not include the cost of the land.*
To buy or to build will of course require more information on your part before making a final decision. Take a hard look at your financial situation. Decide what your preferences are for your home and sit down with a realtor and then a builder to discuss those. Determine which option will best fit your needs & is also within your financial ability to obtain and maintain.
If you need help in your journey to become a homeowner, Apprisen has some great resources and services available to help you.
We offer:
- Budget counseling to help you get and stay on track with your finances while saving for your dream home and future.
- We can help you understand credit reports and scores and give you a personalized plan to help you put yourself in the position of obtaining the loan you need to buy or build.
- Apprisen is a HUD approved housing counseling agency and we also provide Pre-Purchase counseling which is normally a requirement for anyone obtaining down payment assistance with their financing.
Visit www.apprisen.com or simply call 800.355.2227 and talk with a representative today to get more information.
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