Each year, millions of Americans achieve the dream of homeownership. In fact, today homeownership may be more attainable than you imagined. Low interest rates as well as financing products and programs are making it easier for more Americans to purchase a home and enjoy the benefits of homeownership than ever before.
Here are some of the opportunities currently available to homebuyers:
Increased affordability due to low interest rates. Today´s low interest rate environment makes it easier for buyers to afford a home. Lower rates allow folks to secure a lower monthly payment and to qualify for a larger, more expensive home. For example, a $150,000 30 year mortgage costs $105 less per month at an interest rate of 7.5% than at 8.5%. Or, for the same monthly payment of $1,154.00 for 30 years, a homeowner could finance $165,000 at 7.5% or $150,000 at 8.5%.
Availability of low down payment loans. In the past, buyers typically needed to have a substantial amount of money available for a down payment. Today, many lenders are offering loans which require little or no money down. For first time buyers, this gets them into a home sooner and eliminates the need to save for a down payment or to borrow the money from family or friends.
Down payment assistance programs. In an effort to make it easier for Americans to become homeowners, many buyers may be able to receive down payment assistance through federal, state or local programs. Lenders and realtors are good sources for information about such programs.
In addition to these opportunities, homeownership also offers several advantages over renting:
Avoiding the rising cost of rents. No doubt about it... the cost of rent has been rising faster than the rate of inflation. In many cases, renting costs as much as owning a home, especially when you factor in the tax advantages of ownership. For example, the average renter nationwide currently pays $762 per month. This is the same amount a homeowner would pay each month on a $109,000 mortgage, assuming a 30 year fixed rate mortgage at 7.5%. And, does anyone know of family who only pays $762 on monthly rent here in the San Diego area? Probably not. Plus, with good credit history, most buyers today can obtain financing at a better rate than the example of 7.5%.
Tax benefits. The mortgage loan interest and property taxes paid each year are tax deductable. Not including the property taxes and only taking into consideration the interest, a homeowner with a $150,000 mortgage may be able to save as much as $3,500 per year on his or her taxes.
When considering the advantages of homeownership, having at your disposal a well educated and experienced team to assist you is of critical importance. You are best advised to choose a real estate professional who understands the residential market and who has an established relationship with lenders who have the ability to tailor a specific loan program to fit your individual needs.
In addition to these opportunities, homeownership also offers several advantages over renting:
