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
MORE RESOURCES updated Tue. March / 19 / 2024 30-Year Mortgage Rates Move Higher for a Third Day Investopedia Pros And Cons Of Refinancing A Car Bankrate.com How to Refinance Your Mortgage NerdWallet Will Interest Rates Go Down in April 2024? | Mortgage Rates Forecast The Mortgage Reports When to Consider Refinancing Your Mortgage Business Insider Mortgage Rates This Week NerdWallet Current Student Loan Interest Rates in March 2024 Business Insider Mortgage Interest Rates Today, March 16, 2024 | Rates Tick up Business Insider Mortgage Interest Rates Today, March 14, 2024 | Rates Are Still on Track to Go Down This Year Business Insider Mortgage Interest Rates Today, March 17, 2024 | Sticky Inflation is Keeping Rates Up Business Insider Best Mortgage Refinance Lenders of March 2024 Business Insider Mortgage Interest Rates Today, March 13, 2024 | Rates Are Back Down Following Yesterday's CPI Report Business Insider Mortgage Rates Chart | Historical and Current Rate Trends The Mortgage Reports How Soon Can You Refinance a Mortgage? NerdWallet Best Mortgage Refinance Lenders In 2024 Bankrate.com Save up to $1,500 on a Mortgage Refinance With the New FHFA Program Business Insider Mortgage Interest Rates Today, March 15, 2024 | Rates Drop for Second Week in a Row Business Insider Best Refinance Lenders of March 2024: Refinance Your Mortgage The Motley Fool Rates drop - Mortgage rates for March 11th, 2024 Bankrate.com Current mortgage refinance rates CNN Underscored When to Refinance Mortgage: Is it Time? - Buy Side from WSJ The Wall Street Journal Refinance Requirements: What You Need to Refinance Your Home in 2024 The Mortgage Reports Mortgage Rates Dip Below 7%. Recent Homeowners Race To Refinance. Realtor.com News Current 15-year refinance rates — and lenders that offer them CNN Underscored The best mortgage lenders for refinancing in March 2024 CNN Underscored How To Get Equity Out Of A Paid-Off House Bankrate.com How To Refinance An Underwater Mortgage Bankrate.com Mortgage Rate Forecast February 2024 Bankrate.com Will Mortgage Rates Go Down in 2024? What Homebuyers Should Expect Business Insider Office of Research blog: A look at cash-out refinance mortgages and their borrowers between 2013 to 2023 Consumer Financial Protection Bureau What Credit Score Do I Need To Refinance? Bankrate.com 30-year refinance rates: What to know CNN Underscored Should I Refinance My Mortgage Now? When to Refinance As Rates Drop Business Insider Mortgage Interest Rates Today, March 12, 2024 | Rates Are Down, and They May Drop Further in the Coming Months Business Insider CFPB Releases Study of Refinance Mortgage Loans Between 2013 and 2023 Consumer Finance Monitor Should You Refinance Halfway Through Your Mortgage? Bankrate.com Mortgage Applications Increase By 7.1% Amid Rate Drop, Refinance Activity Spikes National Mortgage Professional Mortgage Interest Rates Today, March 11, 2024 | Rates Are Down. But High Inflation Could Send Them Back Up. Business Insider The Great Pandemic Mortgage Refinance Boom - Liberty Street Economics Liberty Street Economics - Auto Loan Refinance Tips Bankrate.com 10-year refinance rates: What to know CNN Underscored
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