When an individual has acquired enough personal savings and a job that allows them to earn a stable salary, they will most likely consider purchasing real estate. Purchasing real estate in the United States is a great alternative to renting an apartment or condominium, although rental properties come at a smaller initial cost than purchasing property. However, when considering the true costs of purchasing Army housing or other properties, consumers should realize that every home loan payment they make on their new property is a strategic investment that they will be able to harvest later on.
For instance, because the tenant of a rental property does not actually own the real estate that they inhabit, they will not be able to enjoy the benefits of selling their apartment for a profit as the property increases in value over time. In fact, many consider renting an apartment or condo to be a waste of money! This is because when a homeowner makes their monthly mortgage or home loan payment, many of which are comparable to a monthly rent payment, they are essentially putting away each payment into the bank. Then, when the property increases in value later on, the homeowner can sell the home for a profit, thus giving them back a large majority of the funds they used to make each of their mortgage payments.
For instance, let’s say that a homeowner purchases Army housing property near a base for $200,000. This purchase required that the home owner put down $6,000 as a down payment and their monthly home loan payments will be $900 a month. After 3 years of owning this new home, the owners find that their property has increased by 20% in value, which brings its current value to $240,000. Over the course of 3 years, the homeowners have paid $38,400 in home loan payments, as well as the down payment that was initially made to the bank when they purchased the property.
Now, if the homeowners decide to sell their property, they will be able to bring in $240,000, $194,000 of which they will use to pay the lender back for the balance of their home loan. This leaves the property owners with $46,000 in profit for the sale! When the owners then compare these earnings with the total amount that they paid during their 3 years of ownership, they will find that they actually earned $7,600 over the course of 3 years, simply by purchasing Army housing close to their base rather than renting a similar property. If more consumers understood the incredible benefits of owning a piece of property, rather than renting, real estate sales would likely increase dramatically overnight. Some first time home buyers may be hesitant about purchasing Army housing near their base, as they are wary about signing a mortgage contract that will lock them into the same property for 15 or 30 years, which are the most common mortgage terms in the United States.
However, with the recent changes that have occurred in the real estate industry, today’s home buyers are now available to renegotiate the terms of their home loan contract in the future. For instance, if the homeowner was to improve their credit rating over time from the score that the lender first measured when they drafted the mortgage document, it is possible that the owner will be eligible to have their home loan refinanced. Refinancing can work to lower the interest rates of a homeowner’s mortgage agreement if the owner has improved their credit score and has been making their home loan payments on time throughout the loan term. It is, therefore, advantageous to buy Army housing near the Army base rather than wasting money by renting.