Sunday, March 24, 2013

Can you afford to BUY a home?

Thinking that you can’t afford to BUY a home?

Are you unsure about becoming a HOMEOWNER?
Are you worried about whether home buying is a good INVESTMENT?
Buying a first home can be an intimidating process. But the first step is deciding asking if: I want to own a home; I can afford to own a home; owning a home makes sense for me financially and emotionally. If you are still struggling with those decisions, here are some facts that might help you take that first step towards becoming a homeowner.
You Can’t Afford NOT to Buy a Home!
Over the last ten years, the cost of rental housing in the U.S. has increased an average of 3.5% per year. If that trend continues, that means that an apartment renting for $1,000 to $1,600 per month will cost more than $1,300 to $1,900 a month in ten years. If you rent the same home for ten years, the total amount you would pay for rent will exceed $140,777 to $225,000.
Tax Advantages of Owning a Home Result in Savings –
None of that $140,777 to $225,000 is returned to you, either through savings or as an investment. Homeownership, on the other hand, has tax advantages over renting a home, and those advantages can help you save money. For many homeowners, part of the monthly mortgage payment “comes back to you” in tax savings. Here’s an example: You purchase a home that costs $200,000. Your down payment is $10,000 (plus closing costs – expenses incurred to actually process the transaction). You finance the balance with a 30-year fixed rate mortgage at 5.5 percent interest. Your monthly payments (not including utilities, maintenance, insurance, etc.) are:
Monthly Mortgage & Tax Payments
mortgage $1,079
property tax (@1.25% tax rate*) 208
Total Monthly Payment $1,287
tax savings per month (assuming a
25% income tax bracket)
mortgage interest tax deduction $216
tax deduction for property tax 52
Total Monthly Tax Savings $268
Total Monthly Cost After Tax Savings $1,019
*property tax rates vary by city and county.
Becoming a Homeowner definitely has advantages and may be for you. If you’re ready to make the move to being a Homeowner, call me, Theodore “Ted” Corbett, I have helped others realize the “American dream” – that of Homeownership.