Investing in Arizona Real Estate

Is buying a home a good investment?

Although an average person with poor credit will wonder if it’s possible to get a home loan with their low credit rating, there really is another question that should be asked. The question is whether or not someone should actually take a loan even if it’s available. That’s why it’s very important that anyone thinking about buying a home should consider all the facts before making the decision to do so.

Financial institutions do not consider a primary residence as an asset but rather an expense. Even so, for most Americans, buying a home is one of the biggest investments that they will ever make. It can be a great investment in the right circumstances. Under the wrong circumstances, it can be a nightmare.

Most Americans don’t have a great deal of money invested in stocks or bonds or mutual funds. In most cases, the investments they have might be through a 401K plan or with a mutual fund. For that reason, the purchase of a house is considered their primary investment. Despite the crash of 2008, real estate in America through most of its history has proven to be a solid investment. That means that it is something that many Americans should consider doing.

When you pay rent you’re putting money in another person’s pocket and building equity for someone else. No matter how long you live there or what a great tenant you are you’ll never have any equity or ownership in the property. The property owner has every right to raise the rent and the reality is that they usually do. In fact, it is common practice for many apartments to offer low rent during the first month or the first year and then they raise rent every time the lease comes up for renewal.

Some renters have found that in order to keep their rent low they end up having to move to a different apartment every time their lease is up for renewal because they have found the move-in rate is lower than what the rent is after staying in the apartment for a while. Even doing this, however, will still result in ever-increasing rents. When you buy a home, depending on the type of mortgage that you get, if it’s a fixed rate then the amount you pay per month will stay the same.

That means that even if the mortgage is a little bit high for you at this time if you can continue to pay it for a few years then as time goes on the amount that you’re paying seems much smaller. The reason is that hopefully over the years your pay or salary increases and the amount that an average person pays for rent will also increase and that means the mortgage payment that you have will often be much less than the standard rent that you might pay had you continued renting. This is just one reason why buying a home can be a great investment.

When you have bad credit and you’re trying to buy a home, the challenge in the current market is getting a mortgage that’s going to be reasonable enough for you to manage it over the long-term. If you get a variable rate, that potentially could cause your monthly mortgage payment to skyrocket which means you’re taking a risk. With that type of mortgage, it is possible that if interest rates fall that your payment could lower but the risk is if it substantially raises. There are those that have taken a chance on this type of mortgage and it worked out for them but there’s been far more where it had devastating results.