Monday, February 1, 2016

Why You SHOULD OWN a Home - 5 Reasons

It's a Great Time to Buy Real EstateDee Sufnar,

5 Reasons YOU Should OWN a Home

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”
 NOTE: You do not have to put 20%, 10%, or even 5% down on a home, especially is you are a first-time homebuyer. There are many mortgage programs that offer 100% financing including VA, Rural Housing, and My Community programs.

2.) You're paying for housing whether you own or rent.

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.” 
 NOTE: Owning a home has tax advantages as well as equity options. When you rent, you are giving those incentives to the owner.

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”
NOTE: Forced savings can also mean spending less money when you own a home versus renting a home. Rents are consistently going up year after year. If you opt for a fixed rate mortgage, your mortgage payment is the same for principal & interest.

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”
NOTE: Consult a tax advisor for all the benefits available including energy savings advantages, home improvement advantages, and homestead advantages.

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”
NOTE: A fixed rate mortgage stays the same while your landlord will increase your rent year after year.

Bottom Line

We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially. If you are considering a purchase this year, give us a call to help evaluate your ability to do so. We have several local mortgage lenders that will help get you prequalified. 
Dee Sufnar Real Estate Consultant