Even in the face of rising home prices in many areas and increasing mortgage rates, it’s still an amazing time to be purchasing a home. This is never more true than for the first-time home buyer.
If you’re in the “first-time home buyer club”, you may be conflicted over whether to buy or rent. You’ll see home prices increase, while in many cities, rental rates are dropping; plus you may be intimidated by the fact that minimum borrowing requirements have become more stringent. However, compared to times past, there are still great opportunities to purchase a home today; it’s definitely worth the time for you to examine your purchase options.
Whatever the case, it is always worth a look before you decide whether you are able to own a home. Here are some benefits to consider before you make the decision to rent.
At times, the difference between qualifying and not qualifying may be small; you may be able to “fix” your credit fairly easily by paying down credit card debt to reduce debt ratios and/or increase your credit scores. As the saying goes: You never really know until you ask.Even if you are unable to qualify, I can always point you in the right direction, so ultimately you will be able to qualify.
One of the best reasons to purchase a home is for potential tax deductions. These may come from either mortgage interest, property taxes, or both. You will definitely want to talk to a tax advisor for more details on this, but if you are able to reap these benefits, they are effectively lowering your mortgage payments.
In addition to the lure of tax benefits, many people purchase homes with the idea that they will being able to sell them at a future date for a price higher than what they paid for them. Even if they plan to keep the property indefinitely, they will feel comfortable contemplating retirement when they know their home will be paid off.
Neither of these benefits is available to full-time renters.
Future Rental Potential
Perhaps you are planning to keep your home for a specific length of time, then rent it out to use as an income property while living elsewhere. Having retirement income that you can look forward to and count on can be reassuring to some homeowners.
Or you may want to become a large investor with multiple properties. Whatever the case may be, for each month that you are making mortgage payments, you are reducing your mortgage liability, and in turn moving yourself that much closer to a worthwhile financial goal.