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Making the move from being a renter to becoming a homeowner... The Advantages: A home is a place to call your own. If you answered "yes" to any of these questions, then home ownership may be right for you. In addition to these lifestyle issues, owning a home can be an excellent investment. Here's why: Tax savings. Homeowners receive tax deductions that are not available to renters. The interest paid on a mortgage is, in most cases, a deductible expense. The result can be a substantial savings on your income tax return every year. Housing cost stability. While rent can increase year after year, if you choose a fixed-rate mortgage, your mortgage payment will remain stable and predictable. (However, you should be aware that an Adjustable Rate Mortgage does not offer this advantage.) It's a savings plan! Your monthly mortgage payments in a sense act as a scheduled savings plan. Over time, as you make your mortgage payments, you accumulate what is known as "equity." Equity is created when the value of your property is greater than your mortgage. In contrast, rent payments never earn equity, thus "throwing away your money." Increasing value. Generally, property increases in value over time. This process is also known as appreciation. This increased worth is equity you can borrow against or take as profit upon the sale of the property. *Be sure to check with your tax advisor regarding the deductibility of mortgage interest.
Home ownership comes with certain responsibilities. First and foremost is your responsibility to make your mortgage payments. In addition to your mortgage, you'll need to have money for the cost of moving into your new home, making any necessary repairs, paying property taxes, hazard insurance, and association dues (if applicable), as well as for regular maintenance of the property. It's possible that these expenses will amount to more than you are currently paying in rent, although not always. If home ownership is your goal, you may need to alter your personal spending habits in order to afford a home of your own. Your mortgage broker can help calculate whether or not it's the right time to become a homeowner. A number of factors need to be considered, including down payment, closing costs, monthly mortgage payment, taxes, and insurance, as well as other related costs of home ownership. In addition to helping you determine whether or not you can afford to become a homeowner, your mortgage broker will help decide approximately how large a mortgage you can qualify for. This process is called "Pre-qualification." Your mortgage broker may also be able to get you "pre-approved." That means actual lender approval for a specific loan amount. Your mortgage broker can also help you by offering available alternatives and options to overcome any potential uncertainties you may have in credit history, income, expenses, and other financial factors. Are you mentally prepared? In addition to being financially ready to assume the responsibilities of home ownership, you need to be in the right frame of mind. To help you make this important decision, you may want to ask yourself these questions:
Contact a professional mortgage broker of your choice, or call me and I'll recommend several local brokers. Click here to view my Mortgage Companies page. Click here to use my Mortgage calculator. Mortgage Calculator Click here to find out why and how my services are free to you the Buyer. Free Service |
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