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WHEN YOU CAN AFFORD A DOWN PAYMENT, STOP RENTING AND BUY!
Not only is buying a home expensive, the cost of homeownership is not cheap. This idea leads many consumers to believe that it is wiser to rent, and not buy.

When looking at a home as an investment, its return is not as valuable as investment securities. Therefore, don't look at a home as only an investment, look at it as shelter.

 

Even though a home does not offer such a great return on your dollar, it still makes more sense to purchase a home as opposed to renting. Not only is the mortgage interest tax deductible, you build equity in your property. For the past few years, mortgage rates have been at an all time low, resulting in great tax deductions. The annual limit for mortgage interest rate deductions is $100,000/year.

** Condos are a great alternative to buying a home! Learn more about buying a condo and condo loans.

Below is an example of the how much money can be saved from righting off your mortgage interest on your tax return:
Suppose you have an annual gross income of $60,000. Your monthly mortgage payment is $1,500. A homeowner has a gross annual income of $40,000. The monthly 30-year fixed rate mortgage payment is $1,000. Over the first few years off the loan, 80% of the payment goes towards interest. This 80% is tax deductible! In the 20% tax bracket, a homeowner can save about $400-$450/year in taxes versus a standard deduction.

Star Loan Services offers home purchase loans for first time buyers with no credit and bad credit!


Lease-Purchasing
There is a common alternative to buying a home. You can rent a house or condo with the option of buying. Below are some benefits of lease-purchasing:

  -- Lease-purchasing allows a home buyer to clean up or build their credit and/or save for buying a home.
  -- When you are in agreement for rent-to-buy, the purchase price of the home you are going to eventually buy is agreed upon from the beginning of the contract. Most lease-purchasing agreements are for several years. This is beneficial because real estate rates rise at a rat of 10-15%/year.
  -- It is very common for the seller involved in a lease-purchasing agreement to utilize some of the rent being paid towards the down payment. The percentage amount of rent being credited towards the down payment will be determined by the seller.

 

Often, you will be required to leave some sort of down payment as security towards your agreement. This deposit is not going to be refundable if you decide not to buy the home.

What type of homes are available for lease-purchasing?
Homeowners that are having a hard time selling their property, have property in poor condition and/or are have moved before they sold their house and want someone to live their.

The sellers also benefit from the rent-to-buy agreement. Their cost of homeownership is covered by the rent being paid. Their house is also likely going to be sold at the conclusion of the lease-purchasing contract.


Credit Tips for Home Buyers:
Fixing Mistakes on Your Credit File
Your Credit and Mortgages
Understanding How Debt to Income Effects You



        

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