Are you unsure about becoming a HOMEOWNER?
Buying a first home can be an intimidating process.
But the first step is deciding if: I want to own a home; I can afford to own a home; owning a home makes sense for me financially and emotionally. If you are still struggling with those decisions, here are some facts that might help you take that first step towards becoming a homeowner.
Rents Increase Over Time
Over the past ten years, the cost of rental housing in the U.S. has increased an average of 3.5% per year. If that trend continues, that means that an apartment or home renting for $1,000 per month will cost more than $1,300 a month in ten years. If you rent the same home for ten years, the total amount you would pay for rent will equal $140,777!
Owning Can Lead to Tax Savings
None of that $140,777 is returned to you, either through savings or as an investment. Homeownership, on the other hand, often has tax advantages over renting a home, and those advantages can help you save money. For many homeowners, part of the monthly mortgage payment “comes back to you” in tax savings.
Get An Immediate Tax Break
Further, special limited-time tax incentives exist. Through April 30, 2010 qualified first-time and repeat home buyers receive a tax credit of up to $8,000 and $6,500 respectively on a home purchase. Repeat buyers must have lived in their residence for 5 of the last 8 years. Tax laws change, so ask your REALTOR® or tax advisor for current information.
Homeownership– It’s NOT Just About Money
The “numbers tell the story” examples should ease your mind about the financial aspects of becoming a homeowner. But there are other, non-financial benefits to homeownership that may partially explain the fact that buyers buy when they are ready. Several research studies indicate that homeownership adds to the value of communities, has positive effects on children, and even contributes to increased voter participation rates.
Homeownership: The American Dream
More than two thirds of American households own their home. They know the benefits of homeownership, from the accumulation of home equity, other financial benefits, and the pride of owning a place of their own. They also had to take that first step of deciding “I’m ready to be a homeowner.”
Why Buy Now?
You may wonder whether it is worthwhile to wait to purchase your home until prices are at their lowest. Prices are not the only factor that should drive your decision. Currently, interest rates are near generational lows that greatly improve the affordability of homes. Also, the homebuyers tax credit is currently available but only through April 2010. Finally, and most importantly, when you have made the decision to commit to homeownership because you are ready, market conditions are a secondary concern. In fact, the NATIONAL ASSOCIATION OF REALTORS® 2009 Profile of Home Buyers and Sellers found that four in ten first-time buyers purchased a home because the buyer was ready to make the commitment to homeownership.
Source: National Association of Realtors