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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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