Wednesday, May 28, 2008
The thought of buying your own home is quite often frightening - more so, if you plan buying for the first time. The idea of making an immediate down payment followed by the regular repayment process is enough to make a prospective buyer abandon the proposal and continue as a tenant. But most of these fears are ill-founded and imaginary and the advantages of owning a home far outweigh the risks involved. So if you are renter, it is time you seriously considered buying a home.When you own a home you will have to pay mortgage and property taxes. However, there is a silver lining. The interest amount is fully deductible when computing both federal and
state income taxes. The mortgage payments of the first few years mostly cover the interest, which means a big-time tax savings.Then there is the equity factor. Equity is the appreciation of the value of your home over what you owe on it. This is valuable money you can not accumulate if you continue to be a renter. Statistics show that homes appreciate in value every year and further you can build equity my making improvements to your house that you can immediately enjoy, such as installing a swimming pool or renovating the living room. You will enjoy those benefits when you sell your home. The value of a home typically appreciates at the rate of inflation, plus an additional 1 to 2 percentage points.
Owning a home lends you more loan-raising and better negotiating powers. The more equity you have in your home, the easier it is to acquire a loan or a line of credit to fund home improvement projects, an investment in second property, or any other capital-intensive item.
Having one's own home is a blessing in that you are free to do whatever modifications you want to your home.A fixed mortgage rate means you will know exactly what your house repayments are for the next 30 years. Renters cannot enjoy such luxury, as the rental payment is bound to increase periodically.
Now let us look at some of the negatives factors that come in the way of acquiring a new home. Though history shows long-term homeowners routinely reap the benefits of appreciation and equity, the housing market has tendencies to fall over the short term. The second disheartening factor is mortgage payments are usually more per month than rent and as an owner you will also incur expenses towards maintenance and repairs.
If unfortunately for some reason o
r the other you fail to make your house payments, it can create serious problems. Lenders could foreclose on you, which mean you could lose the home and all of the equity accumulated so far.In a nutshell, homeownership is a good investment for most people, but they are not without risk elements. If you understand both the benefits and risks of homeownership, you will be better placed to make the appropriate decision about when to buy a home. But owning a house gives you a sense of pride and security and a permanent place to raise your family and become a part of your community.
posted by Avoid foreclosure, We buy houses, Stop foreclosure
@ 3:46 AM
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