If you are currently renting but considering buying a home now that interest rates have dipped, it is a great time to take the leap. It is no longer a requirement that you have a 10, 15 or even 20% down payment to purchase a home. Depending on the type of loan you secure, you can purchase a home for no money down. It pays to do your homework and get pre-approved before you start your search. So if you are still looking for a reason to buy a home, here are 5 of them.
Creates a Connection to Your Community. If you are still renting, you know that at the end of your rental contract one of two things happens, you move or your rent goes up. If your rent goes beyond your means, you are forced to relocate. When you purchase a home, you are creating roots. You know that next month, next year or even five years down the road that you will be in your home. Knowing that you have that sense of permanence encourages homeowners to become connected to their community through volunteering and citizen engagement.
Builds Wealth. Each payment you make toward your mortgage is an investment in yourself. A portion of every payment goes toward the principal of the home. In turn, you are now building wealth for your future. Once you have been in your home a few years, you can then borrow money against your investment if you decide you need money to start a business, buy a car or help pay for educational expenses. This money is available in the form of a home equity line of credit or HELOC.
Lowers Your Taxes. With all the new tax laws in place, one thing has remained the same. If you itemize your taxes, homeowners can deduct the interest they pay on their home, up to $750,000 principal. Your property taxes are also deductible, up to $10,000 in a year, regardless of whether they are state or local taxes. This means that you can take either the standard deduction of $24,400 or itemize your deductions and claim the greater of the two.
More Affordable Over Time. Everyone knows that at the end of a rental contract one of two things happens, you either move or the rent goes up. If you purchase a home with a fixed rate mortgage, you are guaranteed that your monthly costs never go up. This is important to remember since most new homeowners purchase a home and see their monthly costs as a bit of a stretch at first but in 15 years, and four pay raises later, your monthly payments may seem like a drop in the bucket.
Housing Security. In markets that are hot or up and coming, knowing that you won’t be forced out by high rents or apartments turning into condominiums is important. Finding the right place for you, on your own terms, helps you feel less frenzied and maybe even happier. If you know that you are going to be in a location for more than five years, owning a home is a great financial investment. Remember to take into account the costs of not only the home purchase but moving and setting up your new place.
Buying a home is big financial decision. Before you make the leap, make sure you have enough money set aside for repairs, maintenance and upkeep. To help offset costs at first, finding a renter may be a great option. Be open to a variety of living options and consider this an investment in yourself. For more information on how to secure a mortgage, contact Consumers’ Choice Award Winners: Texaslending.com and Union Home Mortgage
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