If you’re kicking yourself for not buying a home in 2012 or 2013, don’t kick yourself again next year.
Yes, home prices have risen, and yes, interest rates have risen. However they’re both still well below their peaks. Remember that from 1979 through 1984, mortgage interest rates were over 10% – sometimes well over. Then through the 80’s and 90’s rates bounced in a range roughly between 7% and 10.5%, only dipping down into the 5’s and 6’s after 2002.
Mortgage interest rates are still a bargain. So while it would have been fun to get in at the very bottom, 2014 is still a good time to take the plunge.
Unless you’re getting free rent, you have to pay to live somewhere. If you rent, your monthly payment will not only cover what would amount to a payment on a house, you’ll be paying for items such as a vacancy allowance, a property management fee, and a profit for the landlord.
What about home maintenance? Yes, when you rent, your landlord pays those costs. But they aren’t free to you. Every rent payment includes dollars to be set aside for repairs and maintenance.
Furthermore, as years go by you can expect your monthly rent to rise.
When you have a fixed rate mortgage loan, your payment will only increase if property tax and insurance costs rise. Even with inflation and even when your income rises, your principal and interest payment will remain fixed.
You’ll build equity. Yes, those who purchased at the top of the boom did lose money when the economy crumbled. But because banks have halted the questionable loan practices that led to the boom, we’re not likely to see that kind of buying frenzy again. If you purchase a house to live in for the next several years, your equity will grow.
You get a tax break. At today’s low interest rates, and depending upon the size of your loan, your interest payments alone might not be enough to give you a better break than the standard deduction. (For 2013 the standard deduction for a couple less than 65 years of age is $12,200.)
However, when combined with property taxes, medical expenses, employee expenses, charitable contributions, etc. making a mortgage payment rather than a rent payment can be extremely beneficial.
The first step toward home ownership is getting pre-approved for a loan, so call us today at 1-800-223-7409 or apply on line at http://www.mikeclover.com/
Our rates and fees are low – and we’ll be pleased to get you pre-approved and ready to make a winning offer.
Homewood Mortgage, LLC
Toll FREE: 1-800-223-7409
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