7 Best Reasons to Buy a Home in 2020
By Ben Wilson
Published 1 year ago
Nervous about buying a home in 2020? You’re not alone!
My dad lost his life savings in the stock market crash… just 12 years ago.
Now I’m a firm advocate of getting fully informed before diving into buying a new home or purchasing any asset, for that matter.
With good reason.
The 2008 housing crash got us all scared.
Owning your own home is a cornerstone of adulthood. So what should you do?
Buying your own home is a vital component of the American dream. But how do you know when it’s time to take the plunge?
Is 2020 a good time to get on the property ladder and invest in a new home? Or should you wait it out?
As with anything, there are always reasons for and against. But let’s take a good look at the main reasons that you should buy a home in 2020.
Benefit from Historically Low Interest Rates
We are currently experiencing the lowest interest rates for 5000 years. Sure, they have been artificially suppressed. But there is no reason that you can’t benefit from this. Low interest rates mean that you can get a great deal on your mortgage repayments. Most people take out a mortgage on their home, so it pays to take advantage of the low borrowing costs that we are currently experiencing. Experts state that they feel that interest rates will remain low for the duration of 2020.
Why are world interest rates so low?
The interest rates were lowered by the Federal Reserve to boost the economy. When the interest rates are lowered, the prices of assets increase. Basically, low interest equals more borrowing power, which creates fluidity in the economy.
The interest rate is the market price, which works on the supply and demand of bonds. Bonds are used to finance projects. In essence, they are loans that the government takes out. Currently, the US government is $22 Trillion in debt, which is the highest it’s ever been. It’s rising at around <$1 trillion a year.
How can you Benefit from the Low interest rates?
If you take out a mortgage in 2020, then you can benefit from lower borrowing costs. Conversely, low interest rates are not good for savers, as they won’t get such a high return on investment (ROI).
PRO TIP:If you get a capped mortgage then you’ll prevent any unwanted surprises if interest rates do rise in the future.
House Prices in 2020 are Still Rising
US and UK house prices are still on the rise, albeit at a slightly slower pace than we’ve seen over the past few years. This means if you get in now, then you can take advantage of these increasing rates. Both the UK and the US are seeing all-time highs in house prices. In fact, both the UK and the US have fewer houses than required. This means that the demand for new housing is high, so house prices will most likely rise for a few years yet.
PRO TIP:The relative shortage of homes in the UK and the US is likely to keep the demand and prices of properties high.
Take advantage of Tax Breaks (and Have More Money)
Did you know that you can deduct the interest that you pay on your mortgage from your taxable income? The tax breaks alone are enticing, but often you’ll save money by paying into your own home. Rather than paying to rent a property, where the money goes into someone else’s pocket.
Renting doesn’t’ make sense in the long run, as you have nothing to show for your money. However, if you buy a property then you’ll be paying toward a tangible asset that you’ll have for years to come.
PRO TIP: You can deduct mortgage interest up to $1 million in debt to improve your home.
Owning Your Home Gives You Peace of Mind
When you own your own home, then you are in control. You don’t need to worry about landlords encroaching on your personal business, deciding to throw you out (for no reason), or rental increases.
It can be stressful to have to live in a home that must be kept in a way that meets someone else’s standards. When you own your own home, you won’t have to worry about all of that. Owning your own home means that you have a stable base that you can call your own and do with as you please.
PRO TIP: Owning your home puts you in the driver’s seat of your life.
Future You Will Be Thankful
Every month a portion of your mortgage will go toward paying off your home. This means that in 15-30 years, you’ll own your home outright. If you compare this to paying rent, where you won’t own anything at the end of 30 years, and you’ll have paid your landlord a vast sum of money to boot.
IIf you pay $1000 per month, you’ll have lined your landlords’ pockets with a grand total of $360,000. Would you like to keep that money, and save it in the form of your house? Heck yes! I’m sure you would.
PRO TIP: The quicker you can buy a home and start paying it off, the better.
Have Pets, Decorate (Do as you please)
When you own your home you can decorate it as you see fit. Rather than it being a house or apartment, your property becomes your home. You can decorate your home to suit your own unique tastes. Something that you often can’t do when renting. Landlords are normally not so keen on pets. Whereas, when you own your own property, you can have as many pets as you like. Which is a major reason to buy a home sooner, rather than later.
PRO TIP: Pets are good for your health, lowering stress and improving happiness. Owning your home means that you’ll feel better in many ways.
You Have Options (Sell, Stay or Rent)
Whether you decide that the home you buy in 2020 is your “forever home,” or perhaps you might want to move to another city later. You have options because home prices are rising, you could sell your home and make bank.
Alternatively, you could rent your property out and have someone else pay your mortgage off for you. This is a great option if you can afford a property manager so that your investment will basically look after itself.
No matter what you choose to do – you’re not stuck. On the other hand. Your home has the possibility of being a solid foundation for you to raise a family and provide for future generations. You don’t get this security when you rent a family home.
Waiting to get on the property ladder shouldn’t be an option. The years will pass anyway, and house prices are rising. Buying your own home is the superior option and something that you should plan straight away. Rather than paying another person’s mortgage (by paying for a rental property) why not invest in your own home.
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