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  Category: Articles » Finance » Article
 

Invest in a Home and See Your Money Grow!




By John R. Blakefield

Purchasing a home can be a fantastic investment, especially as home values continue to grow. Besides looking at a home as "The American Dream" or a place for you and your family to live, realize what an outstanding investment it is!

Some people get so caught up in the need to purchase a house and how that is the greatest purchase they are going to make, they often forget about the investment part of the deal. I know that seems odd, but with an increasing shift towards purchasing a home with little to no money down, and creative mortgages, equity is literally ripped from the home owner, as they often owe a lot more than the property is actually worth. Building the equity in a home is a long term commitment, especially when the mortgage principal is a large amount.

It is important for home buyers to understand why purchasing a home is so important, and not just something they are supposed to do.

The reason why property is such a great investment is that it can increase in value over the years. So you purchase a home at a certain price, and in the years that follow, the value is greater than the purchase price and you have just turned your original amount of money into more!

There are instances where property valued and purchased at $300,000 has been appraised for $600,000 10 years later! You have just doubled your investment! In reality, you could sell the house and make an additional $300,000! Some homes will appreciate faster or slower than others and the area the house is in and development around it usually help determine how much a home will appraise for.

Of course this all depends on your mortgage and interest rate. The more you can pay off the mortgage, the more equity is in the home. Also, when the value increases, you have money you can take out of the house and use it for personal use.

Many people choose to take money out of the house and use it for home improvements and renovation, making it even more valuable! Upgrades, quality materials, and additions can greatly increase the value of a home with little investment.

So looking at home your as an investment that will give you a decent return on your money, it may important for you to buy in an area that is going to quickly appreciate in value. You may also look at how long you are going to stay in the home. If it is going to be short stay and you are planning on purchasing another home in a few years, you may want to look in an area that will appreciate very quickly. By the time you move, you will have a house worth more than you bought!

If you are planning on staying in a home for a long time, perhaps appreciation is not as important, because it will appreciate no matter what, even if it is not as quickly as you would like it too. You may allow certain things like appreciation time as not as important if this is a home you are going to live in for a long time. You may look to amenities, yard, square footage and so on as more important than appreciation.

All these things will help determine the type of mortgage you will get too. Generally, the longer you are going to stay in a home, the longer the life of the mortgage can be. As is the opposite, you should have a shorter term mortgage is you are not planning on living there for very long. Do realize, the shorter the life of a mortgage, the more quickly you can build up equity in your home, and less money you will pay in interest. You can save yourself thousands of dollars by accepting a shorter term mortgage.

The faster you can pay off the money owed on your home, the closer you are to owning your home free and clear, and have full ownership of the property and the equity in it. As the home appreciates, you can see your initial investment grow! A lot of the time, your money is better in a safe and steady market such as real estate, as opposed to the stock market.

So buying a home can mean many things for many people. It all depends on their motivation and intent for buying a home. Is it status? Or maybe a dream home? How about a safe and comfortable place to provide the family? Or maybe it can be a great investment that will have a solid return. Whatever a home means to you, don't forget the investment aspect of it and try not to give up too much equity to a lender. Pay back your mortgage quickly and timely, and you will reap one of the best benefits of owning a home: a return on your investment.



 
 
About the Author
John R Blakefield is a mortgage and real estate specialist. For more information, articles, news, tools and valuable resources on home mortgages or investment loans, refinancing, debt solutions, visit this site: http://www.scourtheweb.com/mortgage/.

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  Some other articles by John R. Blakefield
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