Stability –
Remaining in one neighborhood for several years lets you and your family establish lasting friendships, as well as offers your children the benefit of educational continuity. Any renter who has been asked to vacate unexpectedly knows the value in this!
Appreciation of Property –
Historically, even with other periods of declining value, home prices have exceeded consumer inflation. From 1972 through 2005, home prices increased on average 6.5%, according to the National Association of Realtors®.
Forced Saving –
The monthly payment helps in repayment of the principal amount. Also when you sell you can generally take up to $250,000 ($500,000 for married couple) as gain without owing any federal income tax.
*Disclosure – Check with your CPA or Tax Attorney to verify your own unique filing scenario*
Increased Net Worth
Few things have a greater impact on net worth than owning a home. In a comparison of renters versus homeowners, the Federal Reserve Board of Consumer Finance found that the average net worth of renters was just $4,000 compared to homeowners at $184,400.
While the available tax advantages and potential for earned equity are generally highlighted by most industry professionals as the top reasons to own real estate, it’s important to remember that markets go through cycles.
However, owning real estate that appreciates more than the rate of inflation may help contribute towards your overall investment portfolio, provided your maintenance and mortgage costs are kept low.
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First-Time Home Buyer Credit Checklist
Getting a new mortgage for a First-Time Home Buyer can be a little overwhelming with all of the important details, guidelines and potential speed bumps.
Since there are so many rules and steps to follow, here is a simple list of Do’s and Don’ts to keep in mind throughout the mortgage approval process:
DO
- Continue working at your current job
- Stay current on all your accounts
- Keep making your house or rent payments
- Keep your insurance payments current
- Continue to maintain your credit as usual
- Call us if you have any questions
DON’T
- Make any major purchases (Car, Boat, Jet Ski, Home Theater…)
- Apply for new credit
- Open new credit cards
- Transfer any balances from one credit or bank acct to another
- Pay off any charge-off accts or collections
- Take out furniture loans
- Close any credit cards
- Max out your credit cards
- Consolidate credit debt
Basically, while you are in the process of getting a new mortgage, keep your financial status as stable as possible until the loan is funded and recorded.
Any number of minor changes could easily raise a red flag or cause a negative impact on a credit score that may result in a denied loan.
Most importantly, check with your loan officer on even the simplest questions to make sure your loan approval is successful.
Tax Benefits* –
The US government has created certain tax incentives making it possible for many homeowners to exceed the standard yearly deduction.
*Disclosure – Check with your CPA or Tax Attorney to verify your own unique filing scenario*