Thinking Of Buying A Home?
You Need To Know This ...
Courtesy of StatePoint.
B
etter employment prospects, ris-
ing home values and historically
low mortgage rates are driving
improvements in housing markets across the
country. If these facts are tempting you to
take the plunge, you're not alone.
Keep in mind, buying a home is a major
commitment and shouldn't be undertaken
without careful consideration, say experts.
"While homeownership is often referred
to as the American Dream for good reason,
it isn't necessarily everyone's right move
says Freddie Mac Senior Vice President
and Head of Single-Family Sales and
Relationship Management Christina Boyle.
Understanding the pros and cons of
homeownership can help you make a wise
decision. For potential home buyers, Boyle
offers the following insights:
32 October 8 2015
OWNERSHIP PROS
From paint colors to major remodeling
projects, one of the best parts of ownership
is having a place that is uniquely yours to
customize.
Consider the financial benefits, as well.
At tax time, you may be able to deduct the
interest on your mortgage and property
taxes, offsetting a portion of the cost of own-
ership.
Stability is another major draw. With
fixed-rate mortgages, your monthly princi-
pal and interest payments will stay the same
for the entire period of the loan. This will
make it easier to plan and budget over time,
as opposed to renting, where rates are largely
beyond your control. Furthermore, creating
equity for the future will help provide stabil-
ity and security for your family.
OWNERSHIP CONS
Being your own landlord makes you respon-
sible for the maintenance and upkeep of
your property. Budget for maintenance
costs — from little fixes to such major, costly
issues as roof replacement and water pipe
repair.
Other home-related costs to keep in mind
include utilities, homeowner association
dues, homeowner insurance premiums
and property taxes. Just like with your rent,
your mortgage and utilities should be paid
on time. This will help you maintain good
credit and is essential if you want to borrow
again in the future for home renovations,
new cars or student loans.
SELF-ASSESSMENT
An honest self-assessment can help you
determine if buying a home is right for you.
Do you have a reliable income, good credit
and documentation to verify your savings?
Do you have the money required for home
maintenance and a cash reserve that can
withstand a loss of job, illness or other finan-
cial setback?
Potential buyers must be able to afford
the down payment and related closing costs.
Also, evaluate your life plans. You should
plan to stay in your home for at least five
years.
CRUNCH THE NUMBERS
Free online tools can help you get down
to brass tacks. For a rent vs. buy calcula-
tor, a tax savings calculator, as well as tips,
videos and tutorials needed to make well
informed decisions, check out "My Home at
MyHome.FreddieMac.com, a one-stop refer-
ence designed to help people become smart-
er homebuyers, homeowners or renters.
Before taking any major plunge, get
informed. An honest appraisal of the facts
and figures can ensure a sounder financial
future. *