Home is where our story begins. For so many Americans, homeownership is the impetus to achieving the American dream. To celebrate that quintessential American spirit, First Keystone Community Bank (FKCB) is observing National Homeownership Month this month to recognize the value that home brings to families and communities.
While homeownership is the heart and soul of our dreams, it can also be overwhelming to people buying their first home, empty nesters buying their second home, or hopeful investors looking to delve into the real estate market. Whatever the situation, purchasing a home is the biggest expense most people will ever have, so it’s easy to get cold feet. With direction and advice from your local mortgage lenders at FKCB, homeownership can be an exhilarating experience.
When did National Homeownership Month begin?
National Homeownership Month began in 2002 with a goal of increasing homeownership across the country and reinforce the belief that owning a home is one of the steps towards achieving the American dream. The Federal Housing Administration, established in 1934 to stabilize the housing market after the Great Depression, has helped more than 44 million Americans of all races, religions, and income levels become homeowners.
In 1950, more than half of all Americans owned their homes for the first time in American history, and that number continued to rise throughout the 20th century. More than 70 years later, 66% of Americans own their homes with the average age of a first-time home buyer at 34. The advance and increase of mortgage options along with increased education access and economic expansion have given more people than ever before the opportunity to finance a home of their own.
What are the financial benefits of homeownership?
Buying a home may be a significant investment up front, but it can also be a chance to build wealth and create savings. Homeowners can build equity as they pay down their mortgage loan each month, allowing them to use the equity in the future for retirement, education expenses, or reinvestment in a second property. In addition, consistently paying your mortgage on time will build strong credit that can then help secure other forms of financing such as car loans.
How does increased homeownership help a community?
Homeownership is the cornerstone of a strong community. Buying a home offers the opportunity to secure a strong financial future and contribute to the community. Homeowners often remain in one area for longer periods of time and are more likely to contribute to the maintenance of not just their own property but also the surrounding areas. This pride in their property could boost property values throughout the neighborhood. Longevity can also lead to involvement in local civic groups, school associations, and local government.
What are the most common types of mortgage loans offered by financial institutions today?
There are several types of mortgage loans that can appeal to a wide range of borrowers.
- Fixed-rate mortgages are the most popular type in the country with approximately 90% of homebuyers choosing that option. Fixed rate means borrowers are locked into the interest rate for the entire life of the loan. Their principal and interest payment should not change over the course of the loan.
- Adjustable rate mortgage loans (ARMs) start with a rate that remains constant for a specified period then switches to an adjustable interest rate for the remainder of the term of the loan. ARMs may not be as safe or predictable as a fixed rate mortgage.
- Interest-only mortgages require borrowers to pay only the interest for a period of time and then adjust to include the principal as well.
- The four remaining types of mortgages—Jumbo, FHA, VA, and USDA—are geared toward specific borrowers with specific requirements. More information can be obtained from your mortgage lender.
Why is National Homeownership Month important?
Owning a home is conducive to peace of mind and human prosperity. Recognizing that relationship through National Homeownership Month could encourage more people to look into their options for homeownership. In turn, homeownership will expand their options for the future; will contribute to a more stable economy by potentially increasing the employment rate; and will create a sense of belonging by investing in their community.
For more information on homeownership and mortgage options, call First Keystone Community Bank at 570-752-3671.
