We hear this question all the time!
If you are able to make that choice, consider yourself one of the lucky ones! Right now there are many people in the Scottsdale area that can't choose. They have to rent. Due to the past problems in the local and national real estate market, lots of people are not n a position to buy. The choice has been made for them due to unstable finances, lack of steady employment or bad credit. For those in that situation, do not despair! Recent changes to mortgage lending standards allow many people with past credit issues to now purchase a property again. Ask us for more details.
For those that have the choice, buying might be the best option. When you purchase a home you are making an investment that offers substantial tax benefits and also appreciates in value as you make improvements and maintain upkeep over the years. Last year we saw values in many areas of the Valley go up nearly 15%! This means that in 2015 the home you could have bought in 2014 will now cost that much more!
Top 10 Advantages to Purchasing a Home
1. As you make payments on your mortgage, your personal wealth increases as the mortgage balance is reduced. This can enhance your ability to obtain just about anything you want on credit.
2. Long term, owning a home and paying a mortgage is much less expensive in the long run. For example, let’s say you decide to rent a Scottsdale home for $1100 a month. Annual rental increases are typically around five percent. Your friend buys a home for $250,000 and has a monthly mortgage payment of $1300. Guess what? In a little over four years, you will be paying more than your friend. In addition, your friend receives the tax breaks given to homeowners, which means that in three years, he or she is paying less on the mortgage than you are paying your rent!
3. The stability of house payments under a fixed-rate mortgage gives you peace of mind from knowing exactly what you will be paying each month for the next 30 years. Alternately, landlords can increase rent without warning–and as much as they want, too. As long as you are the home owner, you never have to worry about getting notice that you have to move out of the property because the landlord wants to sell or move in themselves.
4. Buy a home and you can do whatever you want to it–paint your bedroom walls orange, upgrade the kitchen faucet, plant more trees or turn your garage into a man-cave. You can’t do these things when you rent.
5. Owning a home gives you sense of belonging to a community and a place to settle your family. Kids can attend the same schools until they go to college, you’ll make lifelong friends and the hassle of moving every few years is no longer a problem for you.
6. You can take advantage of the capital gain exclusion, a tax rule that allows married couples to exclude $500,000 or individuals up to $250,000 of profit. This is a great tax break for home owners that renters will never be able to use.
7. Homeowners can use a home equity loan to pay off debts or make improvements to the property. Home equity loans offer lower interest rates and are also tax deductible. Home improvements, credit card debt, paying for college or starting a business are a few reasons for homeowners taking out a home equity loan.
8. Homeowners can give their house and property via their will to a relative and keep the home in the family when they pass away.
9. As a homeowner, you gain equity and investment power each month when you pay your house payment. A portion of the payment goes towards the principle balance each month. When you rent, all of the payment goes to the landlord to pay his mortgage You get nothing month after month. You will be amazed at how fast the balance will reduce on the mortgage when you own your own home. Add an extra amount to the payment each month and the power of that payment decreases your mortgage balance exponentially. I like to round my payment up to the next hundred dollar amount. Doing this adds an extra $17.12 to my payment each month but also reduces the principle amount. Add even more and you'll be further ahead even still!
10. Paying your mortgage on time year after year can boost your credit score dramatically and keep it above 700.
To discuss your options for buying a home in Scottsdale, call Shawn at 480-382-7622 or click here to contact her.
