1.Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.
2.Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.
3.Equity. Money paid for rent is money that youâ€™ll never see again, but mortgage payments let you build equity ownership interest in your home.
4.Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
5.Predictability. Unlike rent, your fixed-mortgage payments donâ€™t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.
6.Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.
7.Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.
I think the most important question to ask is how long do you plan to stay. If you intend to stay more than 3-5 years, then buy. If you intend to stay less than 3 years, I would rent. It's also not a bad idea to rent the first year that you move to a new city so you can get to know it. However, most people end up buying close to where they rent as the become familiar with the area.
ROCK Properties - REALTORSÂ®
3010 E Old Settlers Blvd
Round Rock, TX 78665
Ph: (512) 850-4510
Fax: (512) 366-9621
REALTORÂ® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o 512.669.5599 m 512.633.4157
firstname.lastname@example.org | http://www.AustinListed.com
Rica Greenwood, CPPB, GRI, SPSM
Prudential Texas Realty
Do you have cash reserves sufficient for the down payment and closing costs, without draining the bank dry (there are options for small amounts for these items by the way)? Are you able to handle the unexpected expenses that come with home ownership, along with other unexpected expenses that come along? A good rule of thumb for our family is to have enough to cover 3 months of basic living expenses in the bank.
It doesn't cost anything to talk to a mortgage broker regarding the costs involved with purchasing a home, and how much you would be approved for on a mortgage. When you have the answer to those questions, I can set up an email notice from the MLS that will help you begin your search.
If your budget is marginal, it's probably better to let a landlord handle the ownership, and you can continue to reduce debt and increase savings until you are well prepared. But if you are truly ready to buy I'd love to help you find the place that is right for you!
Remember it may cost you about 8% to sell and 3% to buy, so you want to anticipate the appreciation rate to see if it makes sense. If there is a 3%/year appreciation rate, then you might need 4 years just to break even. I generally like to hear five years that you will stay in one place, unless your company or employer will cover selling expenses and potential losses.
That's normally my #1 question to buyers.
Also do you have the cash and credit to buy......downpayment, closing costs, emergency fund for fixes, etc. Employment stability may also be a factor. Does your employer move people every 3 years or are you here for enternity?
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