Why own a home?
Here are the top 5 reasons to consider owning your own home.
1. No more landlords: This may be a highly influential factor depending on potential buyers experiences. Many renters poured a bunch of money into a home that their living in to keep it at a certain standard of living they enjoy only to find that their landlord is planning on selling the home. There’s also the fact that you may receive that 30 or 60 day eviction notice at anytime.
2. Making a home your style: This is much more difficult to do in a rented home as I mentioned, you can make some small modifications, but many things that can be done to a home you own can’t be done to a home you are renting. Taking into consideration Homeowner’s Associations or planned community development restrictions, owning still provides more control and flexibility.
3. Weighing the costs of homeownership: Of course, with homeownership you won’t be calling the landlord to come fix your toilet or dishwasher. So having a financial reserve is important to carry you through months when you run into unexpected troubles. Websites such as Ginniemae.gov offer charts that help you compare how much you’ll save by buying or renting. It’s a helpful tool that allows you to analyze factors such as how much tax savings you’re likely to receive, how much possibly equity you’ll gain, and how much your rent may increase.
4. Long– term plans tilt the scale toward owning: In a recent Tampa Bay article, Walter Molony of the National Association of Realtors said “ For people with long –term plans, the rent vs. buy equation is tilting heavily toward own because housing affordability is at record highs dating back to 1970,” he explains. “ Homes are undervalued in many areas– selling for less than the replacement construction– and rents are rising at a faster pace. Many people are considering ownership now as a hedge against inflation.”
5. Low interest rates and affordable homes will not last forever: If you’re not ready to buy or simply can’t afford to own a home, even the historically low interest rates and exceedingly affordable, home prices might not move you to take the leap into homeownership. However, understanding that these conditions won’t last forever is important. Sometimes when conditions persist, we tend to think they will always be this way.
Distressed sales will begin falling in 2013 and that would cause home prices to creep upward, predicts Moody’s Analytics. With little activity on the homebuilding front, and still a heavy supply, it’s not expected to increase much more. Also, the number of new households each year is rising, which is expected alleviate the oversupply in the coming years.
Mortgage rates are still at historic lows.
Payment example:
Purchase Price: $300,000.
Down Payment FHA: $10,500
Closing Costs: Typically 3% but I can usually get paid by the seller
Payment Principle and Interest: $1402.00 per month
Property Taxes (1.25% of Purchase Price): $312.50 per month
Total Payment: $1714.50 per month and you’re a home owner!
* If condo, there will be a monthly HOA fee.