Buying a home is still the right option for most people.
In fact, this may be the best time in years for renters (or military personnel living in government housing) to make that move to home ownership because home prices are more affordable than they've been in years. Not only that, interest rates are lower than they've been in decades. You don't want to let this opportunity get away, especially if you plan to live in the same area for a few years.
There's so much media focus on falling home values that all the other benefits of home ownership are often overlooked. For example:
LANDLOR
D TROUBLES -
- Rent is going up again
- Landlord won't make repairs promptly - or at all
- No pets are allowed and your children really want a puppy
- Landlord decided to sell (or rent to his brother)
- Can't decorate your new baby's nursery
- Carpet is disgusting and landlord won't clean or replace it
(or even allow you to do it) - Property is going to foreclosure because landlord didn't pay the bank
- Landlord doesn't return your calls
- Landlord harasses you by frequent inspection visits
THE "REAL" COST OF OWNING -
- Rental payments simply give you a license to occupy the property without any financial benefits
- Interest payments on your mortgage are deductible on your Federal and State income tax
- Property tax payments on your home are deductible on your Federal and State income tax
- Principal payments on your mortgage reduce your loan amount and build equity
- Potential for equity growth through appreciation
- Net mortgage payment (PITI minus tax benefits) may be lower than current rent... or at least comparable
If you'd like to play with the numbers yourself and estimate your "real cost of owning," click through to find out How to Compare Rent to Mortgage Payments.
When you look at the many reasons people buy instead of renting (or living in Government housing), I think you'll agree it's still a good decision for most people to buy a home in today's market. That's true in most parts of the country, and certainly in the Fort Meade and Greater Crofton area where our economy is stabilized by having "government" as our local industry.
Learn about the $8,000 Tax Credit for first-time buyers
Margaret Woda is a licensed Associate Broker in the Washington, D.C. - Baltimore - Annapolis area. She specializes in Anne Arundel, Howard and Prince George's Counties, Maryland, including Fort Meade, Andrews AFB, and the U.S. Naval Academy. If you enjoyed reading this post, check out Focus On Crofton and Your Online Relocation Package for Anne Arundel County.
Copyright 2006-12. All rights reserved.
DISCLAIMER: Information contained in this post is deemed reliable on the date of publication, but it is not guaranteed and it is subject to change without notice.
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Margaret Woda, REALTOR and Associate Broker
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Hi Margaret,
I really enjoyed reading your post. It has the makings of a wonderful mailer to potential clients!
Have a wonderful weekend!
Michael
great post - they will regret not buying if they miss out on all the deals and low interest rates!
Margaret, I agree 100% Why continue paying your landlord's mortgage payments when you can be paying your own. Taking advantage of these incentives is a no-brainer.
Agreed...building equity is a beautiful thing.
Bill - 'Looking forward to more of that in the not too distant future
Kathleen - These are basics that we REALTORS routinely shared with consumers. I think it's time to pull them out of mothballs and use them again.
Donna - Even if rates and prices were not at record lows, buying still makes sense!
Michael - Variations on this info served me well over the years in exactly that capacity.
Thanks for your valuable information to potential buyers it does make sense to buy now.
It is definitely a great time to buy more than ever! I have seen my applications increase recently for purchases - hopefully a good sign.
Our rents are still less than owning in many neighborhoods here. Rates are helping that a little.
This is an excellent time to buy and especially first time home buyers. They need to take advantage of the $8000 tax credit. You can qualify if you haven't owned a home in 3 yrs, or if you have a vacation home and have not had a primary residence, or if you are truly a first time buyer.
Well written my friend. But Margaret we all know that some people are just too scared to buy a home because they dont know if they are going to have a job the next day. Hopefully things will get better soon. Have a great weekend. Great post.
Lanre, a renter who is jobless will not have it easy either. Fortunately, we're in a place where employment is relatively steady with the Federal Govt. as our local industry.
Connie - So true... I didn't even get into that because so much has been written about it, but I probably should link to a post about that. Thanks for the idea.
Heath - Here, too.
Naoma - 'Lots of activity in our area, as well.
Pat - If just one buyer reads this and thinks twice...
Margaret- This is a great time to buy but one must understand the responsibilities of home ownership. After this latest binge of using homes as ATM machines I hope the new round of buyers will be more frugile.
Katerina - How nice to hear from you and Nestor! How are things in Florida? Yes, you're right, and I think the return to tougher loan qualifying will help that problem.
Margaret - Amen to that. The break has gone on long enough!
Hello Margaret, your post is written with such professional expertise. I could see this as a flyer for first timer home buyers easily. It's very helpful at a time as this.
Margaret,
nice work. Good links to go with it, too.
Margaret, great information here. You really took the topic and expanded it in to an informative and interesting read. Would this be available for reblogging?
Connie -As to re-blogging, I know it's a huge compliment and I appreciate the request. However, I've too often seen the re-blog rank higher in google than the original one, so I decided not to check that little box any more. However, there's nothing secret about any of this... these are the benefits of owning that real estate agents have promoted for decades. Feel free to use this as inspiration for your own post and run with it. A link or a quote would be nice, but again... it's nothing original.
Rice Property Management - When I got ready to write this, I actually pulled up a flyer I did a few years ago for sending to apartments in the area. There's actually content for several fliers here... the Landlord Troubles, the Real Cost of Owning and How to Figure Out the Real Cost of Owning.
Did anyone click through to read that?
Kevin - Thank you!
Bill - Welcome back. 'Guess I need to write a new post, if you're having to comment on the same one twice. LOL.
I don't think a lot of potential buyers count the cost of ownership - they only look at the monthly rent.
Jeff, it's up to us to educate buyers about this. I've used this chart (click through to my outside blog to read the formula) for over 20 years to help me demonstrate this to buyers. Try it yourself, and you'll see how effective it can be. It's a great closing tool!