Valley Real Estate

jack pearce and al leonard

Home Ownership - Advantages

Thinking About Buying A Home?

Top Seven Advantages

To Owning Your Own Home

Home Ownership
First-Time Buyers
Great Time To Buy

Advantages

As a buyer, you, alone, have the right to choose the location, amenities and how much you're willing to pay for a home. When you sell, you'll get back all the money (equity) you paid into the home over time just like you're cashing out your savings account. However, real estate has been given special consideration when it comes to taxes you pay on the profit you make from the sale of your home. Tax breaks are just one of the advantages of home ownership.

1. Tax breaks.

The IRS lets you deduct the interest you pay on your mortgage, the local property taxes you pay, some of the costs involved in buying your home, and (for most homeowners) no capital gains tax. Further, and at least through the tax year 2010 unless extended by Congress, homeowners earning under $110,000 adjusted gross income can deduct some or all of the PMI premium on mortgages closed through 2010. (Consult with your attorney or tax accountant to take advantage of these deductions.) Example

2. Appreciation.

In a NAR study between 1998 and 2002, national home prices appreciated at an average of 5.4 percent annually. And while there’s no guarantee of appreciation, a 2001 study by the National Association Of REALTORS^® found that a typical homeowner has approximately $50,000 of unrealized gain in a home.

3. Equity.

Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings.

Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability.

Unlike rent, your mortgage payments don’t go up over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes, insurance costs, as well as cost of repairs may rise.

6. Freedom.

The home is yours. You can decorate any way you want and be able to benefit from your investment for as long as you own the home.

7. Stability.

Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

To calculate whether renting or buying is the best financial option for you, use this calculator courtesy of Ginnie Mae:

http://www.ginniemae.gov

Buying For The First Time?

You may want to consider these six additional advantages:

You enjoy being part of a community and a neighborhood.
Houses can increase in value over time, which means you increase your net worth.
As your home appreciates in value, you build equity in your home. This equity works for you if you decide to take out a home improvement loan or home equity loan. Increasing equity also increases the amount of cash you may receive if you sell your home in the future.
Real estate is an important part of a diversified financial portfolio.
The interest you pay on your home mortgage is often tax deductible.
Homeownership offers more flexibility to make changes to your living space, such as painting your walls or putting in new carpeting.

A Great Time to Buy

Download PDF - "Opportunity Knocks for Home Buyers."

The Tax Credit for first-time buyers is ended, but this market still gives new homebuyers an opportunity of a lifetime.

Interest rates are lower than they have been in decades, a large inventory gives you plenty to choose from but is keeping prices low, and home prices are stabilizing.

There are many other federal, state, and local loan assistance programs for first time buyers as well. The HomeTeam will help find the right program for you. Call 330.720.3619 today.