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First Time Home Buyer Tips

Many young families contact me asking for first time home buyer tips. My stock answer to them is: Piggy Bank On Pennies“Are you sure you want to buy and not continue to rent?” Even though I feel strongly that buying is more prudent economically, I also know that the decision to buy has to be made at the right time and for the right reasons. So I invite all of the first time buyers to consider the following.

Pros and Cons of Renting:

–       Less up front cash required then buying.

–       You can pick up and move at any time.

–       You are not responsible for maintaining the property, like fixing leaks.

–       You are probably paying  off someone else’s mortgage and creating wealth for someone else.

–       Your rent and lease terms are determent by the landlord.

 

Pros and Cons of Ownership:

–       You now have tax advantages. Part of your interest, property taxes, and even some repairs can now be a deduction when you file your income tax. I recommend to always check with your accountant or tax advisor to get more facts.

–       Your equity (Equity= represents the portion of your property that you own debt- free and is an important factor in creating personal wealth) increases with every mortgage payment you make. By owing less to the lender you are building equity and financial wealth.

–       You now own something you can sell or leave to your heirs.

–       Depending on the economic conditions, property values appreciate or increase in value thus increasing your equity.

–       Buying a house requires up front cash for down payment and closing costs.

–       Your overall monthly housing expenses will probably increase

–       You now have the responsibility of maintaining the property in case an emergency arises.

–       You can lose the property to the bank if you do not keep up with the payments.

 

 

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