Reasons to Own A Home
1.) Tax benefits. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, and some of the costs involved in buying a home.
2.) Appreciation. Historically, real estate has had a long-term, stable growth in value. In fact, median single-family existing-home sale prices have increased on average 5.2 percent each year from 1972 through 2014, according to the National Association of REALTORS®. The recent housing crisis has caused some to question the long-term value of real estate, but even in the most recent 10 years, which included quite a few very bad years for housing, values are still up 7.0 percent on a cumulative basis. In addition, the number of U.S. households is expected to rise 10 to15 percent over the next decade, creating continued high demand for housing.
3.) Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.
4.) Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
5.) Predictability. Unlike rent, your fixed-rate mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will likely increase.
6.) Freedom. The home is yours. You can decorate any way you want and choose the types of upgrades and new amenities that appeal to your lifestyle.
7.) Stability. Remaining in one neighborhood for several years allows you and your family time to build long-lasting relationships within the community. It also offers children the benefit of educational and social continuity.
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5 Home Fixes Not Worth It at Resale
Daily Real Estate News |
Bathroom remodels and additions may offer some of the fewest paybacks at resale, at least when compared to 20 other popular projects.
The best remodeling projects? Download the 2015 Remodeling Impact Report
The National Association of REALTORS® and the National Association of the Remodeling Industry released a report showing some of the home renovation projects that offer the biggest and smallest returns when selling a home.
The report found that installing a new roof and refinishing hardwood floors was worth every penny of the cost at resale. But which of the 20 projects evaluated offered the smallest percentage back when home owners went to sell their home?
Average cost: $50,000
Recouped at resale: 52%
Master suite addition
Average cost: $112,500
Recouped at resale: 53%
Average cost: $3,500
Recouped at resale: 57%
Average cost: $26,000
Recouped at resale: 58%
New wood-frame windows
Average cost: $26,000
Recouped at resale: 58%
Home owners can overdo it when it comes to the upkeep of their home. This Old House recently spotlighted several ways that home owners’ enthusiasm for home ownership may actually harm the house.
Read the article here: http://www.thisoldhouse.com/toh/photos/0,,20989662,00.html
Buying your first house is an exciting milestone in a person’s life. Read on for the top 10 facts about buying your first house.
- Three out of four homeowners say their home is their biggest source of wealth. The statistic comes from the National Association of REALTORS® (NAR) survey and demonstrates just why it is so important to become a home owner in America. Remember, this means your house is not just a place to live, but also an investment in your future.
- Stretching to get into a home you can’t afford is a bad idea: Millions of homeowners lost their homes to foreclosure in 2008 and 2009 as a result of using creative financing to get into a house that they couldn’t really afford. Make sure you figure out your budget and determine exactly how much you can afford to spend. Then, take a mortgage loan that makes sense to you and that is not likely to increase to such a high level you can’t possibly pay (as may happen with some adjustable rate mortgages).
- You should have a down payment: Banks and mortgage lenders want buyers to have a down payment because that protects the lenders. If you have a down payment, you have equity, which means you own a portion of the home. If property values fall, you are thus less likely to end up owing more on the home than it is worth. The down payment is so important to lenders that if you don’t have one, you will be required to pay private mortgage insurance (PMI).
- You may have to pay closing costs to get a mortgage: These costs include appraisal costs, inspection costs, application fees for your mortgage loan, a title search and various other expenses. You usually either have to pay them up front or they are added to the cost of your mortgage and you have to pay them over time. Occasionally you can negotiate a deal wherein the seller pays the closing costs, but this is not very common.
- You can get pre-approved to find out how much you can afford: Before you even begin looking at houses, you can go to a bank or mortgage lender with your financial information and find out just how much they are willing to lend you. That way, you can look only at houses in your price range and you won’t end up falling in love with a home you can’t afford.
- The seller may pay the commission for your real estate agent: In most cases, buyers do not pay for their agents. Instead, the seller pays three percent to the agent who helped sell the house and three percent to the buyer’s agent who helped you buy it.
- Real estate investments are widely considered a hedge against inflation: Inflation refers to the falling value of the dollar. In other words, the purchasing power of $1 will be less tomorrow than it is today, since goods tomorrow may cost slightly more. Since real estate is a tangible asset that rises in value, it is usually considered to protect you against this phenomenon, at least to the extent of what your real estate is worth.
- Mortgage interest is generally tax deductible: This means you can reduce your taxable income by the amount of interest you pay. If you make $50,000 for example, and your mortgage interest is $9000 per year, you can deduct that $9000 to reduce your income to $41,000.
- Be prepared for property taxes: Property taxes are determined by the assessed value of your home. They have to be paid to the county every year or the tax collectors could take your house.
- Know when buying makes sense: Generally, it only makes sense to buy a house if you plan to stay put for at least two years. That is normally how long it takes for your property to rise in value enough to make up for what you spent on closing costs and on originating the mortgage loan. Furthermore, if you live in a house for less than two years, you may have to pay more taxes on the amount you make on the sale. This, and other factors- such as what the housing market in your area is doing- should be considered before you decide to buy.
- Home is where the heart (and equity) is: 61.4% of the average American family’s net worth is in home equity.
- A homeowner’s net worth is over thirty times greater than that of a renter.
- TGIF! The best day of the week to list your home is Friday.
- Historically, the best month of the year to sell is April. Although we would dispute that –maybe it’s the most common month, but often sellers fare better in the ‘off months’ of summer and winter.
- Odds are you’re going to need some help selling: Homeowners have a 120% better chance of selling their home when using REALTOR®.
- In 2013, NAR reports that the median age of first-time buyers was 31. On average these buyers purchased a 1,670 square-foot home costing $170,000 (guess they don’t live around here!).
- The typical repeat buyer was 52 years old. On average these buyers purchased a 2,060-square foot home costing $240,000.
- According to a NAR Community Preference Survey, 78% of respondents said that the neighborhood is more important to them than the size of the home.
- 57% said they’d give up a home with a larger yard if they could have a shorter commute. (Commuting is one of Arlington’s most attractive features to buyers)
- NAR reports that 80% of home buyers believe their home is a good investment, 44 percent saying it’s better than stocks.
- Buyers searched a median of 12 weeks and visited 10 homes. If you live in Greater Boston, you know this is a much lower number on both fronts.
- 90% of home buyers who used the Internet to search for a home purchased through a real estate agent.
- 90% of buyers financed their purchase.
- In Scotland, homeowners paint their front door red when they pay off their mortgage.
- And finally, don’t be so quick to change your brass to brushed nickel! Brass doorknobs disinfect themselves. It’s called the oligodynamic effect: the ions in the metal have a toxic effect on spores, fungi, viruses, and other germs.
Sources: AGBeat AOL Real Estate Keeping Current Matters National Association of Realtors RealtorMag.com, Written by Don Carrington