What is Best For Me?
Taking the first step toward buying your home is both exhilarating and overwhelming. Before you dive too deep into the process, it is important to consider several factors. Buying a home will be one of the largest financial investments you make in your life, so you want to be well prepared for the adventure ahead.
What is the best scenario for you - Renting or Owning?
As with anything in life, you'll find advantages and disadvantages to consider in regard to deciding if homeownership is the best option for you. It's important to look at both the rewards and realities of homeownership before you commit. Should you stop renting and buy a home?
Renting Versus Owning
The Rewards of Homeownership
Invest in your future
Your monthly mortgage payments are not going into the pockets of a landlord. Instead, with each payment, you build equity in your home and contribute to your own long-term, personal investment.
Lighten your tax load
You will find homeownership opens up a world of potential tax savings*. Typically, the interest paid on your mortgage is tax deductible which can provide significant financial relief. To discover all the possible tax advantages available to you upon purchasing a home, it's best to consult with a trusted tax advisor.
Develop your credit further
Homeownership is one of the best investments you can make. Additionally, making monthly mortgage payments on time will further improve your credit history and help you with future investments.
When you become a homeowner, your monthly payments are no longer subject to increases by the renewal of a lease and the discretion of a landlord. This will help you make a long term budget plan and remove variable factors in your future financial decisions.
Make it your own
With the only potential parameters being homeowner association guidelines or city codes, you are able to remodel, renovate, and redecorate according to your own personal tastes. You are free to make your home your own - however you see fit.
*Everyoneâ€™s tax situation is different. Please consult a professional tax advisor.
The Realities of Homeownership
Know the numbers
There are many significant homeowner costs to consider, such as, a down payment, property insurance, property taxes and maintenance and home improvement. As a renter, some or all of your utilities may have been covered and your landlord was ultimately responsible for maintenance. This is no longer the case when you are a homeowner. Any repairs or other routine maintenance required on the home will be your responsibility.
Owning a home is a long term investment and deciding to move out does not remove your financial responsibility as the home owner. Plus, the process of selling a home can be a time consuming and costly endeavor. It may not happen as quickly as you would like or hope. On the other hand, renting provides flexibility. You have the option to renew your lease (or not) and you suffer only minimal penalties if you decide to break the lease prior to the time of renewal.
The housing market is perpetually unpredictable. While the hope is that the home will appreciate in value over the time of ownership, this is not always the case in every market. If and when the time comes to sell your home, be prepared for whatever condition the market might be in at that time. Housing prices could be down, the market may be slow, and the home may have depreciated in value. Owning a home is typically a sound investment, but it provides no guarantees.
Who Do You Need On Your Team?
Buying a home can be an intimidating process, but if you surround yourself with the right team of professionals they can guide you towards reaching your dream of homeownership.
The best way to start your home search is to find a trusted and experienced Loan Officer. Making it much easier to calculate a housing budget that will serve as a well-grounded foundation for your house hunt.
Your Loan Officer is your best resource for mortgage industry related questions. When determining the best loan program for your individual situation, investigating how much of a down payment to make and calculating your closing costs, this is who can answer your questions and who will be there for you.
Real Estate Agent
Understanding the real estate market can be a challenge, especially since it is incredibly dynamic and constantly changing. A knowledgeable real estate agent can provide valuable insight into the complex world of real estate.
You'll want to find a real estate agent who is aware of local information, as well as your personal needs. You will benefit from a real estate agent who is familiar with the neighborhoods and local school systems where you'll be looking, and who is up to date on recent sales and comps.
Real Estate Attorney
Buyers in certain areas and specific complicated situations may find it necessary to hire a real estate attorney. Involving legal counsel in the real estate transaction can further confirm that the contracts of the transaction are legally sound and meet all governing stipulations and requirements. It may be best if any unique or specific additions to the agreement are provided or refined by a lawyer specializing in real estate. Ask your real estate agent if bringing on legal counsel for your transaction is advised.
Professional Tax Advisor
To get a better perspective of the tax deductions that might be available to you in your specific situation, you can consult with a professional tax advisor. He or she will be familiar with the most recent laws and changes and will help you approximate potential tax savings. The information this professional can provide will help you know which of your mortgage expenses will be tax deductible.