Jim Valentine: Joy of first-time homeownership

There are few things in life as satisfying as owning a home. The first time homebuyer has that sense of satisfaction multiplied many times over as the concept of ownership settles in. The stability of knowing nobody can kick you out on a whim like they can in a rental is a great relief. If you like a nice environment to live in you can upgrade the property with the knowledge that it will not only serve you well as a wonderful living environment but will also enhance your pricing when you choose to sell in the future.

If you are renting, you might be surprised how easy it is to buy a home. Your agent will help you locate a good lender, so you can get prequalified. When you talk with your lender, be sure to ask about different loan programs from which you could select. There are loans ranging from zero down to 3.5 percent down and on up to 20 percent down. You don’t have to save 20 percent to buy your first home. If you served in the U.S. military, you can probably qualify for a zero-down loan, and with the right offer/seller, you might be able to get your closing costs covered by seller contributions.

The Federal Housing Administration (FHA) offers affordable loans with 3.5 percent down. If you buy a home for $250,000, your down payment would be $8,750. If your rental is $1,500 a month, you would likely need $3,000 to move in and your rent thereafter will be $1,500 a month with after-tax dollars. Your loan payment at a rate of 5 percent would be $1,295 a month plus taxes and insurance. For $5,750 more than what you would prepay for rent, you could buy a home and have about the same payment with before-tax dollars.

One of the first things most first-time buyers do in their new home is paint rooms. It is interesting how expressive people can be when they get the opportunity to splash paint on the walls of the home in which they are living. Bold doesn’t quite describe their creative efforts. Of course, most need to be tamed down when they go to sell, but for the time being, enjoy the freedom to do what you want with your home.

Ownership lets you establish the garden you’ve always wanted, put in a flag pole, build shelves in the garage, get a shed for the yard, install a ceiling fan and more. Adapt your living environment to your personal preference and enjoy life in your home, the proverbial “castle of man.” Of course, we all know the man has his castle because she lets him and it is suited to her taste and selection because “if Mama ain’t happy ... !”

Besides the comfort of knowing you won’t have to move unless you want to and the fact that you can modify your living environment to satisfy yourself and your loved ones, homeownership gives you financial benefits and a great emotional return on your investment, “pride of ownership.” The financial return consists of the many tax benefits and appreciation you can realize during your ownership. The $250,000 home that goes up 2 percent a year for 10 years of ownership will be worth $304,749, or almost $55,000 more!

Our advice: Owning a home is a milestone in life and, for many, the realization of a lifelong dream. Once you begin the cycle of ownership, you will probably find yourself buying and selling as you grow older and your wants/needs change. Children come and you need more room, then they leave and you need less room. Your hobbies/pastimes change and you may need more or less land, etc. Regardless of where you go in the future, your first home will always be special and the beginning of a lifetime of real estate pleasure and, ideally, profit.

Owning your first home doesn’t have to be like owning your first car when you had to motor around in a lime green Rambler with three on the tree shifter. You can buy a nice environment for not much more than what you are paying for rent and enjoy the freedom and stability of ownership. Talk to your agent and see what you can do together — you might just be surprised regardless of your background and circumstances. Let the pros work out the details. When it comes to choosing professionals to assist you with your real estate needs … Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. dpwtigers@hotmail.com.