Benefits of Being a Home Buyer
The Big Upside to Purchasing Your First Home
Making the switch from renting to buying is an important decision and seeking more information could be the best first step to take. Buying your first home, like many big decisions, can come with different obligations and challenges. You should be aware, however, that being a first-time home buyer can bring you many benefits.
As part of the decision-making process, here are a few questions you can ask yourself:
- Am I ready to handle the responsibilities of being a homeowner?
- Do I need to buy a home right now?
- Do I have enough money saved for a down payment?
- Is my income likely to grow in the near future?
- How long do I plan on staying in the home?
First, it is good to educate yourself with some basic knowledge of homeownership. One important point to consider is if homeownership is right for you. You should avoid the temptation of buying a home simply because others do. You should have a stable and reliable income to pay back your loan, as well as cover a down payment, closing costs, utilities, and other related expenses.
Next, the financial benefits of buying a home grow over time. You should consider how long you will plan on staying in your home, as well as other factors that may cause you to move.
Finally, your credit score goes a long way in determining how much money you can borrow for your mortgage. Paying off outstanding debt on your credit card can be a positive step to take before buying a home.
Get advice on when to buy a house and the first step you should take.
Benefits of Buying Your First Home
Make it your own, plus more privacy —You have the freedom to do more with your property when you own it. That means if you want hedges to separate you from the world, it’s possible. This also means you might have enough yard space to finally adopt the dog you’ve always wanted. Or you can remodel the garage to turn it into the perfect space for working on cars or other DIY projects. When you’re the homeowner, you have the freedom to remodel, paint, and decorate without having to get the permission of a landlord.
Predictability — Rather than paying rent, which tends to rise over time, a borrower could benefit from a fixed-rate mortgage. This offers more peace of mind knowing what the monthly mortgage payment will be over the term of the loan.
Tax deduction - Mortgage interest, certain closing costs, and property taxes tied to your mortgage could potentially be deducted from your income on your annual federal and state income tax returns. This could potentially add up to thousands of dollars back each year. Please consult your tax advisor for more information.
In addition, the interest paid on a Home Equity Line of Credit (HELOC) can be potentially tax deductible if the funds are used to make substantial home improvements.
Depending on how long you owned and lived in your home before you sell it, you may potentially make up to $250,000 in tax-free profit once you sell your home(or twice this amount for couples who file jointly).
Pride — Owning a home makes you part of the neighborhood and can give you a voice in your community.
Good investment — Real estate can be a good investment, since there’s only so much available land to build on, especially in more desirable housing markets that factor in the proximity and quality of schools, parks, road conditions, etc.
Improved credit score — Many first-time home buyers don’t have a very long credit history. However, they can potentially raise their credit scores by consistently making their monthly mortgage payments on time.
Building equity — Paying your mortgage also brings the added benefit of building equity every month, which is something a homeowner may potentially be able to utilize in the future to borrow against for a cash-out refinance.
New American Funding is Here to Help You Get into Your First Home
To see if you qualify for a mortgage loan, contact New American Funding today!