You just graduated from college, accepted a new job, and are looking for a place to stay. You are highly thinking about staying in an apartment since all bills are paid, and a nearby public Laundromat is available. For $900, you are getting a good price on a nice apartment. But what if you could receive a better asset for that amount each month? Buying a home is a lifelong investment, which keeps growing every year.
By renting an apartment, you have to follow the guidelines set by the landlord. Some of these rules include not having pets in the apartment, not painting any of the rooms, the landlord having control over the maintenance to your unit, to name a few examples. In a house, you have more control over your house maintenance. Even though you have to pay for utilities and bills with a house, you can get a tax break at the end of the year for owning a home. You can earn a tax deduction if you buy a house and pay a mortgage on the house. For first time homebuyers, you can earn an $8,000 tax credit, versus a $6,500 tax credit for a person who has lived in a house previously.
With the many foreclosed homes available on the market, buying a house below its original value is prevalent. For example, a $220,000 home that was foreclosed may sell for $150,000. The savings is $70,000 for the bank owned home that is located in a good neighborhood.
Because of the down economy, people are refinancing their home loans and getting a low interest rate. Currently, the average 30-year fixed mortgage rate is under 4.0%. The fixed mortgage rate can vary by a thousandth of a percentage point, depending upon the banks offering the loan. Investigate the banks offering 15-year or 30-year fixed and adjustable mortgage rates. Each bank will take into consideration your credit history, your credit score, and the down payment that you are able to afford.
Compared to an apartment, a house is a lifelong investment, which is expected to accrue each year. With the economy in a dismal state, banks are willing to work with consumers to secure a mortgage with a low interest rate.
