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Wed for a Little Less and Buy a Little Earlier

by Realty Times Staff

Countrywide Uncovers the Value of Paring Down Wedding Costs to Purchase First Home Earlier

Countrywide Home Loans, Inc., a national leader in residential finance, reveals the advantages for couples of spending a little less on the 'Big Day' and using the savings to purchase their first home a little earlier. Wedding experts proclaim today's average wedding costs between $16,000 and $20,000, especially with the Year 2000 wedding frenzy.

"The money spent on the wedding could be used instead to give couples that financial boost needed to purchase their first home much earlier," said Mike Taliaferro, executive vice president in Countrywide's retail division. "If couples cut their wedding costs in half, they may have an adequate downpayment or reserve fund, potentially allowing them to get into their first home."

"This would also put couples years ahead of their peers in the home buying market," explains Taliaferro. A recent study from the National Association of Realtors(R) indicated that the average purchase age of first-time homebuyers in 1999 was 32 years. In comparison, the 1997 United States Census revealed most couples first marry between the ages of 25 and 27. These numbers suggest a substantial gap in years between marriage and homeownership. "Purchasing a home earlier would allow couples to start building for their future much sooner," concludes Taliaferro.

Couples considering spending less on their wedding to purchase their first home may realize the following advantages:

Tax Benefit -- Offset that marriage tax. Working couples that make roughly the same salary can be pushed into a higher tax bracket after marriage, therefore paying more in taxes than they did when they were single. However, the interest paid on a mortgage can be up to 100 percent tax deductible. With a tax deduction offsetting the marriage tax, some couples may find that homeownership is ultimately a great financial tool. Homeowners should consult with a tax specialist for more details.

Build Equity -- Over time, monthly mortgage payments will reduce the principal balance of the loan and build equity in the home. Building equity can become a financial tool that may actually help borrowers save money. Savvy homeowners with equity may be able to borrow against that equity for other expenses like vacations, a first child, college education or even making home improvements.

Solid foundation -- Owning a home creates a sense of permanence and stability. Homeowners may seize the opportunity to become actively involved in their community. With a stake in their community, homeowners are more likely to maintain their homes and contribute to the economy of their neighborhood. Plus, homeownership provides a sense of freedom and the flexibility to customize a home to fit individual needs and preferences, unlike renters who must comply with the rules and regulations set by a landlord. Many home improvements can actually add economic value to a home while improving the occupant's lifestyle.

Payment stability -- Homeownership can result in many financial advantages. Unlike renting, owners are no longer subject to periodic rent increases. Homeowners with fixed-rate loans have the same mortgage payment for the entire life of their loan, unless they choose to pay it off earlier. In fact, when inflation occurs, a mortgage payment may actually become "cheaper" over time with a fixed-rate mortgage -- that is, the payment amount stays the same each month, while the value of each dollar becomes greater over the life of the loan.

To learn more about home loan options that are available, call Countrywide at (800) 570-9888 or visit http://www.countrywide.com

Published: October 13, 2000

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