4/24/2017

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New Home Buyers

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Homeowner

There are many good reasons to own your own home, rather than renting an apartment or house, and it is hard to understand why some people never purchase their own home, even when they can easily afford to.

Once you have owned your own home, you will look at renting in a different way. That is not to say that renting is bad, it just makes sense for most people, financially, to buy a home, rather than to rent one, although in some instances, it does make more sense to rent.

  • It is duly noted that not everyone can afford to buy a home, nor does everyone who can afford to buy, want to own their own home.

First of all, when you own your own home, you are the one who makes the decisions concerning how you live, although there are some laws that are set up by local, state, and federal agencies that you must comply with, such as building codes, zoning ordinances, easements, taxation, and other regulations.

In the case of home ownership, instead of paying rent to a landlord, you make monthly payment to a bank or other lender. While similar to paying rent, mortgage payments are applied to the loan and goes towards paying the mortgage off in it's entirety.

A home loan is usually underwritten for a specified number of years, depending on the bank, the loan program being offered, and the qualifications of the borrower. Some home loans have repayment periods of 5 years or less, and others go up to 10, 15, 20, 25, and 30 years. With the cost of homes going up, and with interest rates fluctuating on a daily basis, some lenders are offering 40 year mortgages.

Mortgage payments are paid to a bank, or other lending institution, that holds a note and deed of trust, or mortgage, against the property. There are other substantial advantages to paying a house note over paying rent.

  • Interest paid on the monthly mortgage can be claimed as a loss at the end of the year on your federal and state income tax filings.
  • If you keep the home until the balance of the loan is paid in it's entirety, you can live in it for free, unless you get another loan or sell the property. Although there will not be a mortgage payment to the lender, you will still be liable for yearly taxes on the property, and insurance.
  • If you sell the property, any equity buildup, the balance between what is owed on the mortgage balance and the actual sales price is yours to keep, although, if you don't use the money to purchase another home, the equity you receive will be taxed as a profit.

Owning a home is great for relaxation, and physical activities such gardening, painting, and building projects.

Still, one of the best reasons to buy a home is the comfort and quiet enjoyment for you and your family. Children seem to have a greater appreciation of life and develop more self confidence and self esteem when they grow up in a house that their parents own, where they can spend their informative years playing and enjoying themselves in a back yard, and not moving from one apartment to another.

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