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Deciphering the Right Time to Buy

April 03, 2008  |  Difficulty: Easy

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Deciphering the right time to buy a house can be a challenging decision. Rent life seems easy. You don’t have to worry about structural problems, there is no yard to upkeep, and maybe you can decorate the way you want. So why would you want to buy?

It may seem like a money pit, but owning a home is one of the smartest things one can do. Financial experts have proven that most homeowners are more financially stable for retirement. It may seem far off but it is better to prepare now. The secret is to buy as soon as you are able to. Say you buy your first house at age 30, and maybe upgrade once. If you had a reasonable mortgage of 25 years, you could completely pay off your house by age 60. After that debt is paid off, you will have all that extra income coming to you, to spend on whatever you want. Renting never offers this type of incentive. You will never be able to stop paying rent at some point. That’s the great advantage of a homeownership.

Consider these great home buying benefits:
  1. Tax Breaks
    We would all like to save money on our taxes. Homeowners can and do get tax breaks from the interest they pay on their mortgage. Many can even deduct property taxes. That saves a lot of money in the early stages, when most of what you pay is mortgage interest.
  2. Appreciating Asset
    The market is always increasing. Chances are, what you pay for your house now is much less than what it’s worth in 25 years. The national median home price has risen every year for the past 40 years. Now that’s a good investment.
  3. Building Equity
    Each mortgage payment you make is essentially building you equity. This means with each payment, you own more and more of your home. This equity is basically the monetary value of what you put into the home and you could get out if you sold it.
  4. Added Borrowing Power
    Homeowners are viewed as more secure than renters, which means a lower interest rate. Renters have nothing to back up borrowed money with, whereas homeowners can put their equity to work and better secure a loan.
  5. Gained Stability
    Renters know far too well that this year’s rent can increase next year. There is no guarantee that your rent will remain the same. Homeowners, on the other hand, know exactly how much their mortgage payments will be and can lock into an interest rate for up to 10 years.
  6. Home Freedom
    Homeowners gain the freedom to do as they please. They can change the décor, add new appliances, or even take down a wall. Renters would lose those new appliances and have to pay fines for any décor changes. Homeowners benefit by seeing their money improve their home without worrying about decorating fees.

These points may push you towards homeownership.

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