Living in an apartment can sometimes be a frustrating experience. Paying rent every month makes you feel like you are throwing money away. Today’s housing market makes it a great time to buy and in some cases you can buy a home for less money than you are paying in rent. Living in an apartment with tenants above or below you in some older apartments can be noisy. Single family homes do not have this problem, as none of the walls in your home will be attached to any other home in your neighborhood. This in turn means that you will have more privacy, and more importantly, there will be less noise coming from your neighbors, no matter what time of the day it is. Another reason why owning your own home is so great is because you will generally have your own yard, allowing you to have outside furniture, gardens and entertain which can be harder to do in an apartment When it comes to shopping for a home, it is important that you do a good amount of research beforehand. While single family homes do have a lot of advantages, you have to make sure to take your time and find that perfect home for you. Some things to think about is location, neighborhood, schools, and being close to amenities like shopping, restaurants or other places that may be important to you. One of the best ways to research for homes is on this website. This website is updated every 15 minutes with new listings, price changes, back on markets and open houses. This will allow you to easily browse through homes for sale until you find the perfect home for your needs. Bottom line is buying a home today can be a great invest down the road and can come with a lot of benefits over renting. Feel free to call if you would like help in buying or selling your real estate.]]>
Buying vs Renting
Owning a home is a dream come true for most people. To them, it is living the ideal life, for others, it is the worst decision they will ever make as far as their finances are concerned. The reason for this is that there was no proper in-depth analysis before they made the purchase. Many questions come to mind when it comes to owning a home, questions like, do I really need a home? Will I stay in this home long enough to reap the benefits of owning it? Am I ready for the financial responsibilities associated with owning this home? Owning a home is a major financial investment and should not be done without a proper understanding of all aspects of ownership. Below is a look at the pros and cons of owning a home, this should help prospective home owners determine if owning a home is in their favor. Pros and Cons of Owning a Home There is the need to consider the financial impact owning a home will have on you. Would being a home owner have a positive effect on your financial position? Let us look at the advantages and disadvantages from a balanced point of view before arriving at a conclusion. The Pros
- As a home owner, you have greater privacy.
- There is a great possibility that your home will increase in value.
- You tend to have a stable cost as compared to renting because most mortgage rates are fixed.
- Interest and property tax portion of your mortgage is tax deductible.
- There is pride and a healthy self-esteem associated with owning a home.
- The financial commitment associated with owning a home is long term.
- All maintenance related expenses associated with your home is your responsibility.
- When you own a home, you are more likely tied to your community making it more difficult to suddenly relocate.
- When buying a home, there is a down payment, mortgage payment and closing cost.
- If you do not make the mortgage payment, your home can be taken by the bank.
- There is no guarantee that the value of your home will increase.
- It may be a cheaper option than buying a home with comparable size. Your rent might also cover the monthly utilities.
- It affords more flexibility especially when you have a job that requires you to move from place to place.
- Maintenance expenses are not on you. The landlord is responsible for all maintenance from plumbing to electricity as well as other expenses associated with household repairs.
- You are not entitled to a tax break. When you file for a tax return, you cannot claim deduction for property tax and mortgage.
- Your rent is not fixed and there is the possibility that it would increase from year to year.
It is Cheaper to Buy a Home
For the past several years there has been some confusion over whether it has been a better deal to rent or buy a home. Buying has always been the best long term investment. With the changes in the market it is now clear that in almost any situation buying is the best bet. Rents over the past few years have been on the rise and the demand for rental housing has been shrinking rental availability raising the rents and the competition for acceptable units. Rents have been increasing at about a rate of 2.5 percent a year while home prices have been dropping at about 3.1 percent a year. This makes buying a much better option. Lately, there has been an uptick in the home buying market and in some price ranges inventory is low for prospective buyers. Because prices and mortgage rates remain at all-time lows this is a perfect time to get out of a rental and into your own home. If you are looking for some hard numbers on your own personal financial picture the New York Times has an easy to use calculator that will help you determine how much you will save by buying a home. Click here to use the calculator.]]>
No Better Time to Buy
It’s time to buy a home! That is right you heard it here, no more doom and gloom for the real estate market. The time has come to go out and buy some real estate. The only thing holding buyers back has been consumer emotion but a look at the facts should help buyer feel more confident in opening up their wallets for a great opportunity in today’s housing market. JP Morgan’s Market Insights report has outlined why people looking to buy a home have never been in a better position. Here are just three important points from the JP Morgan report. The Price is Right One measure the report looked at was the ratio of personal income to home prices. “Since 1966, the median price of an existing single family home in the U.S. has varied between 150% and 251% of personal income per household. However, roughly three-quarters of the time it has been in a relatively narrow band between 185% and 230%. In September 2011, the ratio was just 153%, implying that to get back to an average price to income ratio, home prices would have to rise by about 27%.” Mortgage Rates are Right Mortgage interest rates are at historic lows as compared to personal income. The report notes, “During the week of October 7, Freddie Mac reported that mortgage rates had fallen to an average annual level of 3.94%. Assuming the use of a fixed rate mortgage with 20% down, this would make the median mortgage payment on a single family existing home just 6.9% of per household personal income, compared with an average of 14.4% since 1966.” What this means is that it is a buyers perfect storm. Buyers who buy now will likely reap a long term financial gain by buying a home at a lower than average cost and financing it for a lower than average cost. It is a win-win situation. Home Ownership Beats Renting The report goes on to look at the cost of renting versus owning. JP Morgan predicts that by the “third quarter of this year, we estimate that the implied median mortgage payment had fallen to just 78% of the median asking rent. In other words, at current mortgage rates, home prices would have to rise by 35% just to get back to their average relationship to rents.” Home buying is now more affordable than it has been in decades. Home prices are at all time lows, mortgage rates are at rock bottom and income levels remain steady. Despite what you may hear on the nightly news home ownership has never been more affordable.]]>
Homeownership is a Good Investment
Year after year, study after study, good market, down market the story is always the same…owning a home is a good investment. Not only does it build wealth but it also provides many psychological benefits too. A survey released earlier this year by the magazine Better Homes and Gardens found that eight in 10 respondents said homeownership is still a good investment and believe owning a home is a smart financial move and a source of pride. Here are some results of the 2,500 people surveyed online:
- 86% of home owners still feel owning a home is a good investment.
- 85% feel “owning a home is one of their proudest accomplishments.”
- 69% of Americans who don’t currently own a home agree with the statement, “No matter what happens in the U.S. housing market, owning a home is still an important goal in my life.”
- 68% of Americans plan to spend money on their homes in the next six months, with roughly half (49%) expecting to pay up to $1,000.
Going from Renter to Owner
Home prices are at rock bottom and mortgage rates at all-time lows so you may be considering going from renter to homeowner. If you are planning on staying put for a while the choice makes sense. There are a few things to take into consideration before you make the leap from renter to owner. First, you will need to determine how much you can afford. Consult with a mortgage professional to help you determine what kind of mortgage you qualify for. Just because you pay $1,000 a month in rent, doesn’t mean you can handle a $1,000 monthly mortgage payment. There are more costs to owning a home than just the mortgage payment. As a homeowner you will also be responsible for property tax, home insurance, utilities, and repairs. To prepare for those costs plan on adding about 40 percent to your base cost. So, if your mortgage is $1,000, add about $400 a month for a better estimate of costs. Before you make a rash decision see if you really can afford the cost difference. Once you know the cost difference spend a few months depositing the difference between your rent payment and your cost estimate in the bank. In the previous example you would deposit $400 a month into savings. If you’ve been able to keep up the deposits and pay your other bills, that’s a sign you can afford to buy. Now that you have been saving more you have more money to put toward the down payment of your new home. These are just a few tips to get you started. Once you have a better financial picture it will be time to start shopping. That is when the fun begins.]]>
It is Cheaper to Buy a Home
For the past several years there has been some confusion over whether it has been a better deal to rent or buy a home. Buying has always been the best long term investment. With the changes in the market it is now clear that in almost any situation buying is the best bet. Rents over the past few years have been on the rise and the demand for rental housing has been shrinking rental availability raising the rents and the competition for acceptable units. Rents have been increasing at about a rate of 2.5 percent a year while home prices have been dropping at about 3.1 percent a year. This makes buying a much better option. Lately, there has been an uptick in the home buying market and in some price ranges inventory is low for prospective buyers. Because prices and mortgage rates remain at all-time lows this is a perfect time to get out of a rental and into your own home. If you are looking for some hard numbers on your own personal financial picture the New York Times has an easy to use calculator that will help you determine how much you will save by buying a home. Click here to use the calculator.]]>