Renters Have Much to Gain by Pursuing Home Ownership

Buying 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

HispanicBusiness.com
FHA(In)Secure
Forbes, NY - 3 hours ago
Guy Cecala, the publisher of Inside Mortgage Finance, says the surge in demand for an FHA refinanced loan had more to do with a general credit crunch and ...
FHA regaining market share Inman.com
Real Estate Report: Creative new financing options The Evening Sun
FHA to raise mortgage insurance premiums Reuters
Housing Wire - Bloombergall 39 news articles

Protect Your Interests While Lending a Helping Hand
Washington Post, United States - 3 hours ago
Or hire a real estate lawyer in California to draw up the sales documentation along with the mortgage documents. I wish to refinance my rental townhouse. ...
REDC Sells 1100 Southern California Foreclosed Homes for Over $200 ... MarketWatch
all 6 news articles

Fitch Rates Lehman Mortgage Trust Series 2008-6
MarketWatch - 6 hours ago
Cash-out and rate/term refinance loans represent 21.48% and 40.34% of the pool, respectively. Second and investor-occupied homes account for 2.70% and 1.16% ...

Mortgage Refinance Options to Think About
3x24 - Your Newspaper and News Magazine, Germany - Aug 26, 2008
Very few people in the world can afford to purchase a home in one payment so the world of mortgages and mortgage payments ‘came to be’. Mortgage refinance ...

National Mortgage Bankers Association president to about industry
Bizjournals.com, NC - 5 hours ago
The Greater Cincinnati Mortgage Bankers Association will host the national organization’s Chairman-Elect David Kittle for a presentation to its members and ...

Analyst: Wachovia focused on preserving capital
Forbes, NY - 3 hours ago
Wachovia has dedicated a team of employees to help Pick-A-Payment customers refinance their loans into more traditional products, he said. ...

Bradford & Bingley to cut new lending after unveiling £27m loss
Telegraph.co.uk, United Kingdom - 2 hours ago
Mike Trippitt at Oriel Securities said: "They need to either shrink the loan book or find a parent which is better capitalised and able to refinance the ...

Taking Home Mortgage Loans
3x24 - Your Newspaper and News Magazine, Germany - Aug 25, 2008
by John Bear Planning to refinance your current mortgage? There are actually several options that are available for you. There are also a number of reasons ...
Personal Loans For People With Bad Credit 3x24 - Your Newspaper and News Magazine
all 3 news articles

Boston Globe
Are mortgage-backed bonds a buy?
RightSide Advisors, CA - Aug 28, 2008
Even then, it may only materialize should either entity fail to refinance its debt or puncture a minimum capital threshold. ...
Higher Fees for Mortgages New York Times
Letters to the Editor Owen Sound Sun Times
Sale of debt steadies Freddie Chicago Tribune
guardian.co.ukall 705 news articles

Refinance your Home Loan and Get Extra Cash
Corsavoo.com, France - Aug 23, 2008
There are online sites offering access to a complete and up-to-date list of lenders dealing with mortgage refinance and this will make the process a lot ...

Wind Chimes and more...

Windchimes for great gifts!

Buy To Let Mortgages ? To Let in Reasonable Capital Growth with Financial Obligation