Are You Spending Or Diversifying Your Monies When Purchasing A Home?

 I was speaking with a client yesterday.  During our conversation,  I shared the down payment on their new home purchase based on their preapproval would be 3.5% of the purchase price.

I also shared their total closing cost estimate would be approximately 4% of their new home price.  Between down payment and closing costs, they would need an estimated total of 7.5% of the home purchase price. 

This family plans on using monies from a savings account to buy their very first home. While continuing our conversation, it dawned on me they were not happy about withdrawing approximately $20,000.00 to make their dreams a reality.

They felt they were spending their hard earned monies. 

I happen to share with them a thought that I would like to share with you. Which is you’re not spending money to buy your new home. You’re investing. You’re diversifying your liquid assets for benefits that are greater than keeping your funds in a savings account. 

By this, I mean money in a savings account today might earn you less than 1% in return.

When you buy a home every month, you’re paying a portion of your mortgage payment to the principal. This is like a forced automatic savings account with an opportunity for a greater return. You’re owning an asset that in most markets appreciates, which means you’re creating more wealth for yourself and your family. 

Owning a primary home also gives you a mortgage interest tax deduction, so over the long haul, you pay a little less money to the IRS.

If you leave your money in a savings account, you have to know that this money will lose purchasing power in the years to come. 

Remember, when you buy a home, you’re building wealth, diversifying your assets, and giving yourself the financial independence a savings account cannot do. 

At the end of my conversation with our client. They expressed to me they have a greater sense of how to make their monies work for them instead of always working for it.

I’ve also put together a complete homebuyer’s ebook to help you better understand the pros and cons of buying a home this summer.

“Here’s what to do now… download your free homebuyer ebook, click here.” 

My name is Edgar DeJesus. I’m the mortgage advisor and branch manager of Treasure Coast Home Loans. Call or text, (772) 444-6362, with any questions that will let me separate opinion from opportunity. 

Thank you for taking the time to read my latest real estate and mortgage report.

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