![]() |
Renters Have Much to Gain by Pursuing Home OwnershipBuying a home vs. renting is a big decision that takes careful consideration, as most mortgage consultants will agree. But the rewards of home ownership are great. For many years, purchasing real estate has been considered an extremely profitable investment. It is an achievement that offers a sense of pride, financial stability and potential tax advantages. Yes, there are certain responsibilities associated with owning a home. Landlords will often argue the benefits of renting, and for obvious reason. If you are renting, you're helping them make their mortgage payment. The numbers are staggering if you look at it this way. If you are paying $1,000 per month for an apartment, and you know your rent will increase 5% every year, then over the next five years you will pay your landlord $66,309. If you are currently renting a house, you may be paying much more than that each month. Either way, you gain no equity by shelling out this monthly housing expense and you certainly won't benefit when the property value goes up! However, if you were to purchase your own home or condominium, you would be well on your way toward building equity within that same five-year period. By choosing a fixed-rate loan program, you can have the comfort of knowing that your monthly mortgage payment will never go up. In fact, you would have the option of refinancing to a lower interest rate at some point in the future should interest rates drop, and this would cause your monthly mortgage commitment to go down. In addition to building equity, there are tax advantages that come into play with home ownership. Depending on your tax bracket, owning a home is often less expensive than renting after taxes. Interest payments on a mortgage below $1 million are tax-deductible, and your mortgage consultant should help you evaluate the tax advantages of various loan scenarios, and share this information with your tax consultant to glean feedback on your behalf. To find the loan program that is right for you, your mortgage consultant will need to evaluate your monthly household income, current assets and savings, as well as any monthly obligations you may have for credit card payments, car payments, child support, etc. These prequalification factors, along with the report of your credit score, will determine how much house you can afford and what interest rate you will pay for financing. It is also important to let your mortgage consultant know what your future goals are, because this will help narrow down which loan option is the best fit for your long-term needs. There are many different types of loan programs available, including "low" and "no" down payment mortgage programs. These types of programs require the borrower to provide less than 3 percent of the loan amount as down payment. FHA lenders rule that the mortgage payment, including principal, interest, taxes and insurance (PITI) should not exceed 31 percent of your gross income, and the PITI plus other long-term debt (car payments, etc.) should not exceed 43 percent of your gross income. Housing is an expense that takes a big bite out of the monthly budget. If you are a renter and feel that "home" is more than just someplace to hang your hat, think about the advantages of purchasing real estate. It may be time to take the step into building your personal net worth as a home owner. Mical Johnson is affiliated with Rock Financial, Inc., a Licensed Correspondent Mortgage Lender, Florida Department of Finance. Mr. Johnson hosts Home Buyer's Seminars which are open to the public each month in the TampaBay area in Florida. Seating is limited. To reserve your seat at the next event, call 813-833-2568 to RSVP and obtain a free copy of Mr. Johnson's Home Buyer Handbook. You can also contact him at http://www.TampaMortgageGuy.com He is also a contributing author at http://www.Debt-Free-Personal-Finance.com
Today’s best mortgage refinance deal? 15-year rates are the lowest available | June 6, 2022 Fox Business Today's best mortgage refinance deal? 15-year rates hold steady for third straight day | May 27, 2022 Fox Business When Should You Refinance an Adjustable-Rate Mortgage? | Mortgages and Advice | US News U.S News & World Report Money Is It Too Late to Refinance Now That Mortgage Rates Are Soaring? The Motley Fool Refinancing slips out of fashion in Pittsburgh, while borrowing against home equity makes comeback Pittsburgh Post-Gazette Land board again rejects Naniloa refinancing Hawaii Tribune-Herald CFPB report: Many borrowers still behind on mortgage payments after COVID-19 forbearance Fox Business Marketing Home Equity Lines Shows the Way to Intelligent Cross-Selling The Financial Brand Best HELOC Lenders | Mortgages and Advice | US News U.S News & World Report Money Refinance Calculator Bankrate.com Trends in Mortgage Refinancing Activity Freddie Mac Today’s mortgage refinance rates: Steady shorter terms offer best savings chances | March 17, 2022 Fox Business 20-year mortgage refinance rates fall, giving buyers savings opportunity | March 16, 2022 Fox Business When to Refinance Your Mortgage Business Insider Today's Mortgage, Refinance Rates: June 12, 2022 | High Rates Are Cooling Housing Demand Business Insider Refinancing a reverse mortgage: What to know Fox Business Today's refi rates increase – June 10, 2022 Bankrate.com Today's Mortgage, Refinance Rates: June 18, 2022 | Rates Remain High After Recent Spike Business Insider How to refinance your mortgage, a step-by-step guide The Washington Post The Mortgage Refinance Rush Has Cooled, But HELOCs Can Unlock Housing Wealth Hawaii Business Magazine Today's Mortgage, Refinance Rates: June 22, 2022 | Rates Probably Won't Decrease Soon Business Insider Best Auto Loan Refinance Rates for June 2022 Bankrate.com Mortgage Refinance As An Inflation Hedge Surfky.com Jumbo Loan Refinance Guide | 2022 Rates and Guidelines The Mortgage Reports How Long Does It Take To Refinance A House? Zing! Blog by Quicken Loans 3.8 million homeowners would still benefit from refinancing amid rise in mortgage rates, says Black Knight Fox Business After Losing Her Home in a Fire, This Teacher Needed a Fresh Start. A Mortgage Refinance Helped Her Do It NextAdvisor Survey finds 74% of homeowners haven’t refinanced despite historically low mortgage rates Bankrate.com 3 Reasons to Refinance Your Mortgage Despite Rising Rates The Motley Fool 10 Mistakes To Avoid When You Refinance a Home Loan GOBankingRates Today's Cash-Out Refinance Rates Fox Business Can You Refinance A VA Loan? Zing! Blog by Quicken Loans Still time to lock in a lower rate: Today's 30-year mortgage refinance rates fall | Feb. 9, 2022 Fox Business Home Mortgage Refinancing Disparities During the COVID-19 Pandemic: Insights for Delaware, New Jersey, and Pennsylvania Philadelphia Fed Cash-out mortgage refinancing hits 14-year high The Real Deal Should You Refinance Your Mortgage in 2022? The Motley Fool Cash-In Refinance: What It Is And If It's Worth It Zing! Blog by Quicken Loans What Do Appraisers Look for in a Mortgage Refinance? Business Insider Mortgage demand falls to nearly half of what it was a year ago, as interest rates continue to rise CNBC
|