by Elizabeth Lucchesi & The LizLuke Team
Signing the dotted line of your first home loan is a big deal - it may be one of the biggest financial decisions you make in life.
The Liz Luke Team
While mild apprehension about the mortgage process is common and expected, an overly cautious attitude can prevent qualified home buyers from capitalizing on a tried and true investment - real estate.
Present economic factors complicate purchase decisions for would-be buyers. Record high incomes are filling the bank accounts of many Americans - especially the latter fifth of millennials approaching Generation X birth years, and the former fifth of Gen Xers born before 1978. Lurking around the corner, however, are nominal interest rate and home sale price increases.
Recent developments, including the ingenuity of lenders to adapt loan criteria in order to combat common mortgagee challenges, may encourage your decision. Read more about these industry changes here. It’s critical to consider the intent of your investment and your time horizon. Determine an action plan by asking yourself a simple strategic question. Are you willing to stay put in a home in order to realize long-term capital appreciation?
On average, experts agree real estate gains are realized in five to seven years. Investment tycoon Warren Buffett advises, “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” Sahil Gupta, co-founder of Patch Homes, a home equity finance company in San Francisco, told U.S. News & World Report, “ ‘In general, if you're buying for the long term, then market cycles matter less.’ ”
Many millennials (and the outlying Gen Xers) are making the leap. Recent data from the National Association of Realtors report over a third of home buyers are 36 and younger – comprising the largest share of all home buyers.
The bottom line? Don’t let mortgage misconceptions hold you back from homeownership or real estate investing. Take heed to the caution of self-made millionaire David Bach, “ ‘the single biggest mistake millennials are making’ ” is not making home ownership a priority. Bach insists buying a home is “ ‘an escalator to wealth.’ ”
For more information, contact Elizabeth Lucchesi of The LizLuke Team at elizabeth@lizluke.com or 703.868.5676.
