Buying A Home - PM MHR

Should I Buy A Home?

Many renters wonder if buying would be a better idea for them. Renting and owning a home both have benefits and drawbacks. There are a number of considerations to take into account when trying to decide which would be best for you.

1. Length of stay. When you purchase a home at market value. While homes will appreciate in value over time, in an average market like the Midlands, a home buyer needs to have owned a home for a minimum of 3 years in order to sell it without having to pay anything out of pocket. The reason for this is due in part to the variety of 100% financing programs now available. In most cases, during the first 3 years, most buyers owe more than the home is actually worth and therefore cannot sell it for enough to cover theri expenses. So, if you intend to be in the home for less than three years, you may want to consider renting.

2. Tax benefits. There are numerous tax benefits to owning your own home. A tax advisor can give you more specific information on all of the benfits of owning your own home, but in most instances the mortgage interest you pay on your primary residence is tax deductible.

3. Desire to maintain. Homes require maintenance. While the condition of a home you purchase may mean that some require more than others, even new homes will require routine maintance. In this age of do-it-yourselfers, many owners are able to cut down on the cost of routine repairs by doing the work themselves, but there are still expenses. Buying a condo or garden home with an association may cut down on the amount of maintence you have to perform yourself. However, often times association fees can be nearly as much and sometimes more than your mortgage payment. Whereas, when you rent usually repairs are the responsibilty of the owner.

4. Equity. When you purchase a home and you own it for several years, you build equity. Equity is the difference between what you owe on a home and it's value. In addition to paying down your mortgage, real estate in general usually appreciates in value. This means that when you decide to move and sell your home, you should be able to do so for a profit. Even better is that in most instances *you will not have to pay any capital gains tax on the money you make from the sell. Whereas when you rent, you will not receive any return on the rent you've been paying while you lived in the residence.

5. Economic Stability. Many people choose to rent because in the event that the fall on hard times, they can simply opt out of their lease and move to a smaller, less expensive home. Whereas, many owners have to go through the process of selling their home, which can at times be difficult. At the same time, rent in general tends to go up each year, whereas, a 30-year fixed mortgage will have the same payment each month year after year. The only variations being in taxes and insurance.

*You should contact a tax advisor for more specific information on the regualtions regarding tax credits and benefits in the selling, purchasing, and ownership of a home.

No one else can tell you if buying or renting is right for you. It's something each person has to evaluate and decide for yourself. Many renters often dont' realize just how simple it is to buy a home these days. New financing programs have entered the market place. Whereas you used to have at least a 3% downpayment, these days you can get as much as 125% financing on a home. While financing above the reported value of a home still is not common place, 100% financing is. With a decent credit rating getting a 100% loan should not be a problem in most cases.

Always remember this too, when a real estate brokerage offers free buyer representation, such as we do, there is no obligation to buy when you talk to us or look at homes. Often times you need to investigate further by talking to a Realtor who can give you more detailed information regarding your specific situation and who can put oyu in touch with loan officers whose programs would be best suited for your needs. Often this is the only way to make a true determination of what would be best for you.

Feel free to call (803-765-1777) or e-mail us at sales@mhallrealty.com to speak with us further about possibly buying a home.

Should I Buy A Home?

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