There is nothing like walking into your own home. The feeling you get walking into a home with your name on the title is irreplaceable. In recent years, more people have missed out on this feeling and are renting instead. The reasons for this have been well chronicled: lack of down payment, strict mortgage guidelines, unstable job market and a comfortable rental situation. Over the past year, things have started to change. There are more loan programs now more than ever and rental property demand may have hit a peak. If you have been on the fence about home ownership, the time to start looking is now. Here are five reasons to start looking for your dream home and stop renting today.
Increased Loan Programs:Shortly after the mortgage collapse, the number of loan programs was reduced to a bare minimum. While there will never be the abundance of options there was at the height of the market, there are more programs today than at any point in recent years. Most of these programs focus on helping borrowers with the down payment. Every week more programs requiring anywhere from 1-3% down payment are hitting the market. These programs still require solid credit scores and other compensating factors, but they don’t break the bank to get into. With lender and seller credits coupled with using these programs a buyer doesn’t need tens of thousands of dollars to get approved.
Reduced Monthly Payment:The prevailing thought is that renting is more affordable than buying. The reality is that with still near record low interest rates buying is much more affordable than you may think. In most cases, the largest chunk of your monthly payment consists of your principal and interest repayment. Lower interest rates have kept this number on a par, or in some cases, lower than what you would pay for rent. Monthly rents do not appear to be coming down any time soon. If all things are equal, why wouldn’t you spend your money on something you own rather than throwing it away on rent?
Rental Demand:As we mentioned rental demand is near an all time high. Like most other things, rental properties are based on supply and demand. The increased demand has pushed rental prices to their highest level in years. While there are many tangible benefits of renting in the right situation there reaches a point where it may not make the most sense. Paying the same for a property you own outweighs the benefits of wasting money on rent.
Equity Building:It wasn’t too long ago that owning a property was considered a form of retirement savings. With people changing jobs and moving more than ever this is considered ancient thinking. The reality is that if you find your dream home and stay in it for some time you will most likely build equity. This equity can be used to take out a second mortgage to pay for college, refinance to pay off debt or to simply hang on to for the future. Once your home is paid off you will be sitting on a nice nest egg you can use however you like.
Tax Benefits:An unheralded benefit of home ownership are the tax benefits associated. There are a number of write offs and deductions you can use that swing your tax return in your favor. In some cases, this can impact your return by thousands of dollars. Paying the same for a new home can actually be a net benefit of thousands of dollars for you.
A lot has changed in the mortgage market in recent years. If you haven’t looked in some time you may be surprised at the number of new programs available. Stop renting when you can be a homeowner. Call for more information today!