I would like to briefly summarize why it is better to buy a home (especially today) instead of renting one! Listed here are 3 major reasons why you should look at buying a home…
Buying a home is actually less expensive as compared to renting! Here’s why…
Renting a home for $1, 000/mo for 5 years is $1, 000/mo x a few years x 12 months/year = $60, 000
Yet buying a home for the same $1, 000/mo for 5 several years is less than $60, 000!
When you buy a home the government gives you any tax deduction for the mortgage interest that you pay. Even though the exact amount may change let’s just assume that your current tax deduction equals only $1, 200/year or $100/mo. That means you get $100/mo x 5 years x 10 months/year=$6, 000
Right now, you also may qualify for $8, 000 First Time Home Buyer Tax Credit (2009). That means should you haven’t owned a home in the past 3 years you can get an additional $8, 000 from the Government just for buying a home in 2009!
This means you can get ($8, 000 + $6, 000 =) $14, 000 cash when you buy your home over the next 5 ages. So you will pay $60, 000 is housing payments within the next 5 years but if you own a home you will get $14, 000 cash back. This means you only spend $46, 000 regarding housing over the same 5 years which is only $766. 67/month!
Dollar for dollar it is cheaper to buy a your home instead of rent one.
The owner of the home is permitted to the equity in the home. Equity is the difference between simply how much the house is worth and how much you owe. (If a house will be worth $200, 000 and you owe $150, 000 then the value is $50, 000. ) If you are renting then the landlord is the owner and they get to keep the equity in the home.
When you buy a home you have a mortgage payment each month. Generally, each payment includes a principle amount, an interest amount, property taxes and threat insurance. The principle amount of the payment reduces the amount that you simply owe on the property. (If you pay your mortgage repayments for 30 years you will not owe anything on the home as you will have paid off the mortgage. ) If you buy a home after that your monthly payment reduces how much you owe so it is like paying oneself. But if you rent, your monthly payment reduces how much your landlord has an outstanding loan for and it’s making them richer!
Every time there is a repair on the family home, if done correctly, that repair can increase the value of your home because it will be worth more. If you upgrade older windows, replace the shingles on the roof or remodel the kitchen, that may make your home worth more money. When you own a home you have to purchase these repairs. When you rent, the landlord must pay for these kinds of repairs but they don’t mind because it makes the home well worth more money!
Making regular payments on a home mortgage will increase your credit history. Better credit means better financing for your next home invest in, a refinance of the first home and for a vehicle acquire or any other credit purchases saving you thousands of dollars in curiosity over the years to come.
Right now is the best time to acheter louer a home. The home values in the area have bottomed out and the percentage of interest on loans are at all time lows.
We are seeing residences that used to be $200, 000 that are now selling from $150, 000 or less! The experts say that we are in the bottom of the housing cycle and prices for homes will never be this low again. You can buy a home that used to be worth $200, 000 for only $150, 000. Then, as the market cycles less difficult you will be able to capture the new equity in your home.