OWNING vs. RENTING
For most people, buying is one of the most important decisions in their lives. The decision is not usually an easy one. But, trends in home prices and mortgage rates, combined with the tax advantages of home ownership, make this an excellent time, to turn the home of your dreams into a reality.
OWNING VS. RENTING
If you are thinking of buying a home, you've probably already asked yourself, "Can I afford to buy?" Another good question is, "Can I afford to keep renting?"
Rental payments are gone, once you make them. But with each mortgage payment, you are "buying", something tangible, building up equity. The longer you own your own home, the larger your equity.
There are however, maintenance expenses and property taxes you will have as an owner, that were not your responsibility as a renter. (These were probably reflected in your rental costs, but not identified). If you purchase a condominium, exterior maintenance is usually included in a monthly Homeowner's Association Fee, but you still have the responsibility of maintaining the interior.
A home is an investment that helps you keep up with inflation. Although not all homes appreciate at the same rate and some years are better than others, real estate has historically kept pace with and usually appreciated faster than the rate of inflation.
Keep in mind, too, that through the years, your income most likely will increase faster than any increase in your mortgage payment. Rent payment, on the other hand, tends to increase, right along with your paycheck.
HOMEOWNER TAX ADVANTAGES
When you are figuring out how much you can afford to commit to monthly mortgage payments, don't forget the tax advantages of home ownership.
Both property taxes and interest payments on a mortgage for an owner-occupied home are currently tax deductible.
In the early years of a typical mortgage, all but a small percentage of each monthly payment is used to pay off the interest on the loan.
This means that as a homeowner, deducting the payments you make on property taxes and yearly mortgage payments could substantially reduce your annual taxable income.
And, later on, should you decide to take advantage of the growing equity in your home by taking out a home equity loan, the interest on up to $100,000 of home equity, indebtedness is tax deductible.
YOU CAN MAKE A HOMEOWNERSHIP A REALITY
Take a goad look at your personal financial situation in comparison to housing price trends and mortgage plans available in the community you'd like to live in.
You'd probably discover that you are closer to home ownership than you realized. And that, in fact, this is the time you've been waiting for.
MORTGAGE RATES
As a rule of thumb, a one-point drop in mortgage rates means that half a million more families will qualify for affordable financing. Yours could be one of them! Rates for conventional, 30 years fixed rate mortgages are now in a reasonable range.
Increasing popular alternate forms of financing may make your loan even more affordable. Your consultant can provide information on the types of mortgage plans available to you.
