So you are feeling uncomfortable taking the leap into the obligations of a new home and mortgage? Are you nervous about homeownership?
Realize, unless you are living rent free with your parents, you ARE paying a mortgage… your landlord’s.
Take a look at these 10 reasons why and you might just go for it and become a first time homeowner!
In a nutshell from the Joint Center for Housing Studies at Harvard University:
“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”
1. You can ramp up energy efficiency. Energy-efficient improvements and energy efficient appliances will reduce your monthly utility bill as well as earn you tax credits.
See www.energy.ca.gov for Rebates and Incentives.
2. You can customize your space. If you want to knock down a wall to make a larger kitchen or master bedroom and redo the bathroom to reflect your tastes, owning your own home gives you the freedom to do what you please and you won’t have to worry about losing your security deposit.
3. Your environment and lifestyle are better. It’s usually obvious whether a neighborhood is made up of owners or renters. Homeowners have a financial stake in their neighborhood and consequently take better care of their homes.
4. Being a home homeowner helps you save money. Every month you pay your mortgage you are building up your equity. A portion of your payment is applied to your loan balance and your loan decreases. With each month your net worth rises. Another surprise savings… Owning a home and bundling your home owner insurance with your car insurance will save sometimes a lot on your car insurance. It’s also a good idea to put money away for home improvements … Your shopping choices may change from the Mall to Home Depot and Lowe’s when you become a homeowner.
5. Owning a home may increase your earnings. If you have the space, you could rent out a spare bedroom or driveway space to commuters, In some cities with scarce green space, home owners even rent out small areas for a vegetable patch.
6. No landlord can tell you to move out. Renters can face an eviction notice if the landlord suddenly decides to sell the home, rent to someone else or otherwise terminate the lease. Some landlords take forever to get repairs done. When you are in control, you make the calls and get things done on your schedule.
7. You will have retirement security. Unlike paying rent every month, which goes on forever, your mortgage will be paid off at some point in time. Imagine being “rent-free” in your retirement years!
8. Unlike rent, a fixed mortgage can’t go up (even if inflation does). Fixed mortgage rates don’t go up, even if the cost of everything else does. Current mortgage rates are still at historical lows. If you purchase with a 30 year fixed rate your housing expense is locked in over the next 30 years (or less). As a renter, one thing you can count on is your rent increases over that same thirty year time frame.
9. Homeowners receive great tax deductions. The primary tax benefit of homeownership is the ability to deduct mortgage interest payments (due to amortization, the majority of your payment for the first 22 years is interest, so you have an excellent write off. In addition, you can also deduct eligible expenses (running a business from home, energy efficient improvements, etc… Check with your CPA for more)
10. You can take advantage of current historical low interest rates and home prices. Interest rates are still at some of the lowest rates of the last 50 years and home prices in some markets remain soft which makes for a very appealing buyer’s market. If your income and job are stable, now might be a good time to call Jackie to get pre-qualified.
Contact Jackie at (949) 600-0944
Visit www.mylenderjackie.com for great mortgage info
Jackie Barikhan is a Nationally Licensed Mortgage Advisor NMLS # 914312