As far as renting versus purchase - I think that is a question for you to tackle yourselves with the assistance of your agent and perhaps your financial planner.
Good luck and best,
Unwavering Commitment to Service, Unsurpassed Results
Making the Move from Renter to Homebuyer Making the Move: Renter to Homebuyer
Renting definitely has its benefits. There are low upfront costs. You have more freedom to relocate if your career calls, you can move closer to a loved one on a whim, or if you simply desire a change of scenery you can easily make that happen. If a pipe breaks you are merely inconvenienced by making a phone call to your landlord to have it repaired.
However, you may eventually get the itch to own. Why? Let’s take a look as some reasons.
Build Equity when buying a home
When you buy a home your payment each month contributes to paying off your mortgage loan. You then gain equity that you can borrow against for any major purchases that may come up. You can also refinance your home to try to get a lower interest rate. When and if you decided to sell your house all of that equity will be a cash profit. Home values go up and down but over the years real estate has consistently appreciated. You can check the Home Price Index by state on the Federal Housing Finance Agency website.
Tax Deductions for your home purchase
Unlike renting, you can deduct mortgage interest and property taxes. Also, if you own your home long enough you will not have to pay capital gains tax when you decide to sell.
With rent increases you do not know what you will be paying in a few years from now. However, let’s say you buy a home with a 30 year fixed rate mortgage. You will basically have the same payment amount for the next 30 years.
When you own a home you may find yourself becoming more involved in the happenings of the community. You will gain a sense of home, stability, and pride. You could make long-term happy relationships with neighbors and find many opportunities to volunteer and be involved in making your community the best it can be.
If you decide to move you may have the option of keeping your home and using it as an investment property. You can rent it out and use it as a platform for generating income.
If this were the route you would like to go you could start preparing now. Start building your credit score. Save some money to cover closing costs, a down payment, and your move. Connect with a real estate agent to be your guide on this new journey.
I suggest that you repair the bad cracks in your walls before selling as buyers will possibly think that there is something wrong with the structure of the home.
Here is an article published by the National Association of REALTORSÂ® stating the reasons why owning your home is better over renting:
7 Reasons to Own Your Home
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 REALTORSÂ®. 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.
Hope this is helpful to you.
Prudential Connecticut Realty