Buying a house is part of the "American Dream," however some
people don't see the advantages of owning a home in America. Some of the reasons I've heard for not
becoming a homeowner are I'm scared the
market will drop again, I don't want to be responsible for repairs, I don't
have the down payment money or I want to wait until I get married.
Although someone may
feel these are valid reasons not to purchase a home, there are many advantages
to being a homeowner. The major reason
is the tax benefit you get each year.
Before we discuss some of the benefits, let's delve into the reasons
some people choose not to buy.
#1 I am scared the
market with drop out again
The real estate
market is cyclical. If you review the
history of the U.S. home values index you will see it goes up and down
throughout time. During WWI/II and the
Great Depression, the market experienced a decline and in the 70's and 80's
there was a boom. The peak we had leading
up until 2006 was unprecedented, however safeguards have been put in place to
stop predatory lending and protect the consumers. Currently, interest rates are still at record
lows and the market seems to be in a healthy state.
#2 I Don't Want to Be
Responsible For Repairs
When you purchase a
home, you are able to also purchase a
home warranty that will cover you in the event disaster strikes. Home warranty's are very affordable and can
be purchased for as little as $300-500 per year. Also, if you stay on track with maintaining
your home and it's systems you can avoid some repairs caused by negligence.
#3 I Don't Have the
Down Payment Money
If you are a
first-time homebuyer, there are many programs available that will assist you
with grant funding to purchase your new home.
Based on the type of loan you get, you are able to receive up to 6% of
the sales price as gift funds towards your purchase. As soon as you've made the decision to become
a homeowner, begin to save money to build your house fund.
#4 I Want to Wait Until
I Get Married
It may be ideal to
get married and then buy a house, but it is not the only option. If owning a home now will be beneficial to
you, once you get married you can sell your home and use the money from the
sale of your house towards the down payment of your next house. Or you
can rent out your house and earn passive income.
BENEFITS
Tax Deductions
Most people can find
reasons for why they don't want to do something, so let's find a few reasons
why buying a house is a GOOD investment.
When you buy a house, some of the money used for your closing cost are
tax deductible. Also, each month you pay
your mortgage, you are paying principle and interest. The interest portion of your payment is tax deductible.
Build Equity And
Wealth Over Time
By making your
regular monthly payments, it decreases the amount you owe on your home,
therefore increasing the equity in your home.
Equity is the difference
between the amount you own on the home and the market value. If you pay off your house, your home becomes
an asset. In recent time, many people
found themselves in an upside down situation where they owed more than the
house was worth.
Fixed Monthly
Payments
Another advantage is
your payment amount (Principle & Interest) never changes. Most people get a 30 year fixed mortgage to
have equal payments. You never have to
worry about your landlord raising your rental rate every year.
Pride of Ownership
You've carved out
your piece of the American dream. When
you own your home, you can make renovations to your home without having to
consult with a landlord. You can paint
your walls any color you want, knock down or build a wall and decorate however
you want.
In the end, people have many reasons why they
should or shouldn't buy a house but there are many benefits to owning a
home. It is best to review your
financial situation with your lender to determine how much buying power you
have and if this is the right time for you.
Tabitha
Rector-Richardson
Broker,
REALTOR®
(443) 415-4215 cell
(410) 363-1535 x101 office
Clearly, the Seller/Listing Agent
wasn't familiar with Title 17-607 which states a real estate Agent cannot require a Buyer as a condition of settlement
to use a specific settlement company, title insurance company, escrow company,
mortgage lender, or title lawyer. The
penalty if found guilty is a misdemeanor, up to $5,000 fine and up to one year
in prison. 
