Five reasons why buying a home is still a good idea

August 7, 2012 by ·


(ARA) – A still murky economy and uncertain real estate market may have you wondering if buying a home is a good idea. Whether you’re thinking about buying, or already have and just need some affirmation, you may find it comforting to know there are still plenty of good reasons for financially stable people to buy a house. Here are a few:

* Homeownership can help make good credit even better. If your credit is in poor shape, you’ll want to monitor it before seeking a mortgage. But if you have good credit, live within your means, and consistently make good financial decisions, a mortgage can be the kind of “good debt” that helps your overall financial health. Making regular payments on a mortgage shows potential lenders that you’re a less risky candidate for a home loan. Before you begin home shopping, it’s a good idea to check your credit. Enrolling in a product like freecreditscore.com can help you better understand and leverage your credit.

* A mortgage can function like an automatic savings plan. By now, you’ve read the news reports about how little we Americans save these days. Well, every year you pay on your fixed-rate mortgage, is a year of building equity, and equity is like money in the bank. When it’s time to sell – whether you’ve stayed in your home seven years or the full 30 year term – you’ll have created equity and should be able to sell your house for more than you owe.

* Homeownership comes with plenty of financial perks, including an income tax credit for property taxes you pay on your home. For detailed information on tax breaks check out IRS.gov. Buying a home also affords you the opportunity to halt your housing costs. Rent will always go up from year to year, but if you have a fixed-rate mortgage (avoid adjustable rates) your biggest annual expense – housing costs – will be locked-in.

* Mortgage interest is a good deal when stacked up against other types of interest that don’t do much for you – such as high credit card interest rates or low rates on savings accounts and CDs. Mortgage rates are low right now, meaning you can pay less over the life of a loan than at practically any other time in recent history. Plus, it’s the only kind of interest that you can deduct from your taxes.

* Prices are still relatively low and inventory is high. It’s been a buyer’s market for a long time, but that’s going to change. The question is: when will the market start to improve in your area, taking home prices with it? You’ll have to do some legwork and astute research to determine when is the best time for you to buy.

If you monitor your credit and are on a sound financial footing, buying a home can still be a good idea. And now is as good a time as any to make your purchase.

Filed Under: Buyer Tips, News & Tips · Tagged: , , ,

Rent or Own? The Pros of Each

June 18, 2012 by ·
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By : Andy Asbury    99 or more times read
For some people, owning a home is an integral part of achieving the American Dream. But for others, and perhaps a growing number of people, home ownership is not in the cards. And oftentimes, that is a calculated choice people make. The reality today is that some people simply prefer to rent a home instead of own one. Of course, there are upsides to both renting and owning.

Owning a home: Pros
The home is yours. Want to change the paint color? Go ahead. Refinish the floors? You can do that, too. Build equity as you make monthly mortgage payments? Check. People who own their condo, loft or single-family home have flexibility to make the changes they want, provided they are not outside the bounds of city ordinances (in the case of single-family homes) or association co-op rules (in the case of condos and lofts).

And in some markets, including Minneapolis, owning a home actually makes more economic sense. According to a recent Wall Street Journal survey (based on data from Zillow, Inc.), 12 of 27 metro areas favor owning a home rather than renting one. In Minneapolis, for example, the average monthly mortgage payment for homeowners is $776, compared to the average monthly rent payment of $953.

Homeowners also enjoy a sense of security. They are not subject to landlords who do not want to extend a lease, or who are not prompt in dealing with issues that arise. Additionally, homeowners essentially invest in themselves each time they make a mortgage payment or complete a home-improvement project.

Renting a home: Pros
You are not the owner. That means your landlord, not you, likely is responsible for major repairs. Furnace goes out? Call the landlord. Ditto if, for example, the roof develops a leak. For that reason, people who rent can take comfort in knowing exactly how much of their money goes into their home each month or year.

Renters also enjoy flexibility. Since leases generally last for fixed periods of time, renters can live in one spot for a year or two, and then try somewhere else. Or maybe you have a job that keeps you on the move. In that case, renting is a good choice because you are not on the hook for selling a home before you can move.

Renting also tends to be less labor-intensive than owning. Renters often can decorate a home to line up with their personal tastes, but they generally do not need to worry about things like landscaping, mowing the grass in the summer, or removing snow in the winter. As a result, renters have more time for the activities they enjoy.
Author and Broker, Andy Asbury, studies Minneapolis condos, closely. His team of Urban Agents at Better Homes and Gardens Real Estate Area Leaders are focused on the latest trends in buildings like the Carlyle in downtown.
Filed Under: Buyer Tips · Tagged: , , , , ,