You may currently be renting and pondering your next step. Do you renew your lease or do you buy a home? Owning a home has responsibilities and costs. The costs include the mortgage, property taxes, homeowner’s (hazard) insurance, plus routine and major maintenance. Renting a home has a monthly rent payment and renter’s insurance. As you evaluate a home purchase, you may want to determine what your costs may be moving into a larger home like utilities, operational costs, etc.
There are some advantages to owning a home:
-A financial investment even in down markets
-Build equity in your home rather than building equity for your landlord
-Provides tax benefits like property taxes and mortgage interest deduction
-Personalize a space and call it yours
As you evaluate a home purchase, you may want to consult with your financial planner or accountant on potential tax deductions and financial advantages.
Some renters wonder if they can buy. Upon talking with a lender, renters found out that they could buy a home and their monthly mortgage payments were close to their monthly rent. If you find that you cannot buy right now, a lender can help you create a plan so that you can buy a home in the future. Continue saving money for a downpayment, pay your bills on time and take the necessary steps to improve credit scores.
There are are a variety of loan programs available to buyers.
Conventional requiring anywhere from 3% down and more. At 20% down, there is no PMI (Private Mortgage Insurance)
Federal Housing Administration (FHA) requiring as little as a 3.5% down payment for owner occupants
Veterans Administration (VA) with 0% down for those who have served and are currently serving in the military
Some local employers offer down payment assistance to employees. If your employer doesn’t offer assistance, there are programs promoting home ownership based on income and household size.
I can recommend a lender that can help educate you on the variety of mortgages and help you find the right mortgage for you.