Skip to content


You'll love banking here.

Get the latest news from LMCU

Perks of Homeownership

Posted June 17, 2021  |   Topics: Wallet Wisdom

Deciding between renting or becoming a homeowner? There are many things that you may want to consider if now is the time for you to finally…finally…own your own.

Building equity.
The term equity means the amount of value you hold in an asset. There are two ways that equity builds in your home.

1. As you make your monthly mortgage payment, reducing the amount you owe on your mortgage.
No matter if you are renting or owning, you typically have a monthly housing expense. One major difference between renting and owning is that when you pay your monthly mortgage payment, it goes towards lowering the amount you owe on your loan thus increasing the amount of equity you have in your home when you go to sell it. When renting, you pay your landlord rather than putting those funds towards something you own.

2. As the value in your home increases.
According to Black Knight, Inc., over a 25-year period, the average annual appreciation rate of a home is 3.9%. While the annual appreciation of 3.9% is not a guarantee, keeping up on repairs and maintaining your home will help ensure you get the best return when you decide to sell.

Increase in long term wealth.
According to the Federal Reserve Board’s Survey of Consumer Finances, the average homeowner has a net worth that is 44x greater than the average renter, and that gap has been widening over time. In 2020, the average homeowner had a net worth of $231,400 compared to that of the average renter at a net worth of $5,200. Every time a homeowner makes a mortgage payment, they are increasing their net worth by increasing the equity they have in their home.

Make the place your own.
When you own your own place, you can decide on what appliances you have, whether or not you want to renovate your bathroom as well as what you do with your walls. This gives you the opportunity to make your place your own.

Homeownership provides you with a monthly payment that is predictable and stable over a long period of time. With inflation, rent could go up. In addition, the landlord could sell the property or decide to stop renting to you.

Hurdles to homeownership.
Down payments are often sighted as the top barrier to homeownership with many believing they need a 20% down payment. However, the average down payment is much less than that. According to the National Association of Realtors’ 2021 Home Buyers and Sellers Generational Report, those age 22-30 put an average of 6% down on the purchase of their home last year compared to 10% down for those aged 31-40.

Financing options.
At LMCU, we offer mortgage products that you can put as little as 0-3% down.* Additionally, there are a wide variety of options and various programs that offer down payment assistance to those who qualify.

Our expert loan officers will discuss the various down payment options and help you determine the best fit for your financial goals. To get started, connect with one our loan officers at or call (844) 754-6280.

Topics: Wallet Wisdom