Preparing for Home Ownership
You want to buy a house, a place of your own. You're probably excited and a bit nervous at the prospect, espacially if you a first time home buyer. If home ownership is your dream, this information can help you make it a reality.
Do you really want to own your own Home?
Have you considered what it is about owning you own home that you find appealing? The decision to buy a home is certainly not one to be made lightly ofbecause owning a home requires significant investment in time and money. Therefore, the best way to start the home buying process is by taking a realistic look at what you can expect from home ownership and what owning a home implies. There are many good reasons for buying a home, provided you're ready for the increased responsibility that comes with home ownership.
Advantages of Home Ownership
If you are planning to buy a home, you probably have good reasons in mind, ranging from the purly personal to the very practical. Perhaps you are ready to settle down in your community and want the feeling of permanence and involvement that comes with owning your own home. Perhaps you need more space in which to raise a family. Or, maybe you want more leeway than you have in a rental unit to adapt your living space to suit your individual taste and needs.
For many people, the motivatiion for home ownership is primarily financial. Owning your own home can be a first-rate investment for a number of reasons.
When you buy a house, your monthly mortgage serves as a type of scheduled savings plan. Over time you gradually accumulate what lenders call 'equity', an ownership interest in the property that you can often borrow against or convert into cash by selling the house. In contrast, renters must continue paying rent, without the opportunity to build up equity.
Stable Housing Costs
Another advantage of home ownership is that while rents typically increase year after year, the principal and interest portions of 'fixed-rate' mortgages remain unchanged throughout the entire repayment period, which is 30 years for a 30 year year fixed-rate mortgage. In fact, because of the effect os inflation, this means that over the years you pay the same amount but with ever 'cheaper' dollars. (However, with an adjustable-rate mortgage or ARM, the interest portion of the mortgage payments may increase if interest rates increase.)
Houses may increase in value or 'appreciate' over time. In certain parts of the country, its not unusual to find that a house that sold for $50,000 fifteen years age is worth a higher amount today. This increased worth is as good as money in the bank to the homeowner.
Homeowners also get significant tax breaks that are not available to renters. Most important, interest paid on a home mortgage is usually tax deductible. This alone can save you a substantial amount each year in federal income taxes.
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