Home Ownership; a New Year’s Resolution 12/27/2009
Consumer doubts about the purchase of a first home are sometimes considerable…. Can I afford a home? Will I qualify for financing? Where do I get a mortgage? How will I find a home that fits my needs? What will it cost? There is information available to alleviate these concerns and we encourage you to call a real estate professional to answer your questions and explain the home buying process to you. We believe the next four months offer one of the very best opportunities ever to become a homeowner and while there are many reasons you should make “Purchase My First Home” a New Year’s resolution here are ten benefits of home ownership we think are important.
- Pride of Ownership
Owning your own home adds to your sense of self-esteem and personal pride. The satisfaction that comes from feeling connected to the land you own and the home in which you live is ages-old. - Security of Tenancy
With homeownership comes stability. When renting, you never know when you may have to move because of new ownership, rent increases, deterioration of the property or other changes. As a homeowner, you decide when and if you want to move. - Privacy
While there are usually some limits on the access landlords have to property, almost all landlords can access your property for necessary inspections and maintenance. For many renters, this lack of privacy is a significant discomfort. Homeowners on the other hand generally have much stronger property rights. - Decorating
Homeowners are free to decorate, remodel and accessorize a home any way they want. Not only do you have the right to make improvements, but the value of those improvements becomes yours as well. Having your living space just the way you want it can significantly increase your satisfaction with your living environment. - Financial Predictability
When you buy a home with a fixed-rate mortgage, most of your monthly housing payment is fixed. Financial planning and credit are more easily managed with cost certainty. - Building Equity
When you own your own home, you pay rent to yourself instead of a landlord. Most homeowners pay for their purchase by obtaining a mortgage. As you pay off that mortgage, your equity builds and you gain an increasingly larger share in a valuable asset. Over time, that asset can work for you in many ways, such as home equity lines of credit. - Investment Appreciation
There are certainly no guarantees of property value appreciation but in the long-term real estate valuations almost always increase. As an example, in Fort Collins the average price of a home in 1998 was $160,000 and today it is about $240,000, an increase of 50% or $80,000. When you decide to sell your home this appreciation is usually tax-free. You can reinvest that appreciation in other real estate or you may wish to downsize and keep the ‘profit’ for retirement or other purposes. - Tax Benefits
The cost of home mortgage interest and property taxes are usually tax-deductible. Depending on your circumstances, thousands of dollars in taxes can be saved each year resulting in more take home pay. In addition, there is an $8,000 tax credit available to qualified first time home buyers as long as you have a purchase contract completed by April 30, 2010 and the purchase closed by June 30, 2010. - Interest Rates
Mortgage interest rates remain at historically low levels. This can save you a significant amount on your monthly payment and / or allow you to qualify for a bigger mortgage. - Supply
There is a good selection of all types of homes on the market, most properties are competitively priced and sellers are motivated.
As another year draws to a close, we would like to thank all of you for your comments, questions and suggestions. We appreciate hearing from you and are looking forward to another year of writing this column and wish all of you a Happy New Year!