First-Time Home Buyers

There's little question that owning your own home is a cornerstone of the American dream. Unfortunately, first-time home buyers are often overwhelmed by both the process and the expense. While first-time home buyers may be attracted by the potential of huge rewards, it’s still a scary event. As well it should be! After all, a first-time home purchase is probably the biggest financial commitment a young geek has ever encountered.

If you’re still renting, you should consider buying that first home as soon as possible. Let’s look at seven of the biggest reasons to become a first-time home buyer…

First and foremost, it's your home. You can do anything you please; paint the walls any color you like, and make all the crazy mods you can think of (finances permitting, of course). If you want to wire the place for television and Internet in every room, go for it. If your dream office has midnight blue walls and knockout shades, get painting. If you want a Tiki bar in the living room, start ordering the bamboo.

The financial rewards of buying your first home are substantial. The best part is that you'll likely end up paying the same amount of money to own as you currently pay to rent. Compare those monthly rent payments to what you'll pay for a mortgage and taxes and it becomes quite clear.

First-time home buyers save money on taxes. When you prepare your state and federal taxes - say, with TurboTax - you may be amazed at the tax benefits. For most folks, there's no better write-off than owning your own home.

First time home buyers build equity. The longer you own a home, the more the value of the home will increase over the initial purchase price. Let's say you buy a little place for $150,000. In two years, the value of that house might increase by 20% - so the house will then be worth $180,000. That $30,000 difference is your added equity. If you need cash down the line, you'll have the option of taking out a home equity loan.

Finally, a place for all your stuff. Is your apartment bursting at the seams with junk? Have you had to resort to renting space in a storage facility? How much is it costing you to store all of those treasures? Quit throwing out that money each month and put it towards a mortgage, instead.

First-time home buyer programs rock. Thankfully, there's a wide range of first-time home buyer programs to make the process easier to deal with (and the payments easier to make). We lucked out and bought our first home through a corporate relocation program. If your company ever offers a relo package that helps you buy that first house, you should give it due consideration, even if you're not crazy about moving. And if you're a police officer or teacher, check into HUD's Officer Next Door and Teacher Next Door programs.

Mortgage rates are relatively low. Rates are still attractive. Take advantage of the situation.

The more you think about it, the more it becomes clear... any geeks who have never truly considered owning their own home, should. Today.

This article first appeared in my Lockergnome channel on September 17, 2004.