People are renters for various reasons. They may not be interested in owning a home because of the cost and effort in maintaining a home. Perhaps a person doesn’t have the down payment necessary for a home purchase. Maybe personal plans call for a very short stay and a home purchase really isn’t practical. A great number of renters, however, could own a home today and are not aware of the financial advantages of home ownership.
For instance, current market conditions have not been this good since I started selling Naperville real estate in 1982. Home prices are lower than they have been in years and mortgage rates are also very attractive. In 1982, home prices were low, but interest rates were through the ceiling at nearly 20 percent. It’s said that timing is everything and this is certainly the time to buy.
Consider tax advantages, too. The only sizable tax deductions remaining are the mortgage interest and property taxes paid as a result of owning and financing a home. The monthly rent check that goes to the landlord could actually be partially returned by a tax deduction if the same amount went to make a mortgage payment instead of rent.
Plus, a homeowner saves money every time a mortgage payment is made. You could say it’s a “forced savings account.” The principal amount of the mortgage loan is reduced with each payment thus reducing the amount owed and increasing the amount that will go to owner upon the sale of the property. If the home is located in an area of increasing values, the passage of time continues to inflate the amount of profit the owner will realize when it is time to sell.
If you are now renting, contact a Realtor to investigate your situation. This year may be the time for you to get on a firm financial footing through the purchase of a home.