The Benefits Of Home Ownership

The decision to purchase a home is exciting and a major investment for your future.  Because there is only so much of it to go around, real estate is the top choice for many investors and the desire for most families.  This article is designed to highlight some of the many benefits of home ownership and how buying a home can often turn the American Dream into a reality.

One of the most profitable markets in real estate is rentals, which means that many families are paying to live in a home that isn’t their own.  In some cases, renting a home is necessary.  For all others, the money that would be spent on rent could instead be used to pay a mortgage.  In fact, monthly rent payments often exceed that of a typical mortgage payment.  One of the greatest benefits of home ownership is putting money into something that you can call your own and knowing that the monthly payments are going toward your home’s equity.

Speaking of equity, many properties experience a growth in value as more development moves into the area or the economy strengthens through an increase in job opportunities.  If this happens, home values soar and owners can bask in the glory of their newfound profit.  When you purchase a new car, it depreciates the moment that you drive off of the lot.  When you buy a home, however, it has the potential to appreciate year after year.  There are few things in life that can offer you a return above and beyond your original purchase price, but a home can.

When you own a home, you will enjoy the freedom of decorating and making any changes that you choose without needing the permission of a landlord or property owner.  In addition, you may even be able to use your home’s equity to finance some needed improvements and/or repairs.  In some cases, these changes may even increase the value of your home.  An upgraded kitchen or bathroom, hardwood flooring or an additional room are examples of changes that could result in added value.

Another advantage of home ownership is the tax benefits that are available.  The interest paid on a home mortgage as well as most property taxes paid are tax deductible.  For additional information on deducting mortgage interest and property tax, consult the IRS or a tax professional.

In addition to providing yourself and your family with a feeling of stability and permanence, home ownership can also help strengthen your credit profile through timely mortgage payments and a steady financial history.

 

How Much House Do You Need?

While it may be nice to have a home with five bedrooms, an eat-in kitchen, and a four-car garage, how many of us really need this much space?  The best approach is to look at a few particular aspects of your life and lifestyle to make the right choice.

What Is The Size Of Your Family And Will It Grow In The Near Future?

If you are a newly married couple who plan on having children, purchasing a family home with ample room to grow may be the right choice for you.  Childless couples, retired couples, or singles may want to rethink the large home and opt for something a little more size appropriate.

Do You Need Office Space Or Like To Entertain?

If you use your home primarily to meet your daily needs, such as a place to sleep, eat, and relax, you may want to consider a home with a large den or office space and a formal dining room.

Do You Plan To Stay In Your Home Long-Term?

If you are just entering the housing market and plan to live in several houses or in several locations throughout your life, you really don’t need your dream home the first time around.  Buying a property that suits your lifestyle for the period of time you will live in it is your best strategy.

These are just a few considerations you should take into account when finding the right sized home for you and your family.  Having a clear picture of the type of house you need will make the task a little easier, and keep your finances in check!

Understanding Interest Rates

If you are in the market for a new home, or it is time to refinance your mortgage, there is no doubt you have been looking at the current interest rates.  But with all the financial jargon and the multitude of lenders and mortgages available, understanding your options can really be confusing.  Here are some simple facts about interest rates and how they affect your bottom line.

Do Your Research

As with any major decision, knowing the facts about the housing and financial markets before making any major decision is of vital importance to protecting your investment.  Review online the national mortgage rates for different types of loans.  There are a number of sites where you can find this information, or you can ask your REALTOR® to point you in the right direction.  In general, fixed rates will be higher, but as they don’t fluctuate over the term of your loan they may be a better choice for those who need the stability of fixed payments.  Also when comparing interest rates, be sure you are comparing the APR, or Annual Interest Rate, to ensure that your comparisons are on equal ground.

Also keep yourself informed on some of the riskier options that may be out there.  ARMs, interest-only mortgages, no-doc loans, and 100 percent mortgages are some of the more aggressive loan types out there.  They may be appropriate for your situation, but they present more risk for the lender, and are not always a wise financial choice.  They also often come with higher interest rates that may return to haunt you later.

Preparing Yourself To Get The Best Rates

Understood or not, ultimately we all want to get the best interest rates for our mortgage in order to save money.  No matter what type of mortgage you choose, there are a few steps you can take to get the best rates.  You can reduce your rates by:

• Saving a sizable down payment
• Establishing a pattern of paying your bills on time
• Reviewing your credit report and correcting any errors
• Shopping around with multiple institutions and different types of lenders

Armed with these simple facts, you can protect yourself from bad financial choices and remain aware of the steps you should take to get the best interest rates.