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Buying a Home

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Buying and owning your own home can be a very rewarding experience if you are properly prepared, know what to expect and make the right financial decisions. There are several advantages to homeownership, but it comes with additional responsibilities and potential risks as well.

House Hunting in Today's Market

If you're shopping for a home, you may come across homes that are listed as "short sales" and "REO or Bank-owned". The more informed you are about these properties, the more successful your buying experience will be. Also, be sure to rely upon your real estate professional for help and never be afraid to ask questions.

Some important advantages of owning your home:

  • You can take pride of homeownership. You’ll have a place that is uniquely “yours” that you can customize – from paint colors to major remodeling projects.

  • You may have some tax benefits. You may be able to deduct the interest on your mortgage and property taxes. These tax savings may offset a portion of the cost of owning your home.

  • Your monthly payments will remain stable. With fixed-rate mortgages, your monthly payment will stay the same for the entire period of the loan, making it easier to plan and budget – whereas rental rates rise over time. (Remember that if your real estate taxes or hazard insurance premiums go up, your escrow will go up – increasing your monthly payment.)

  • You have the opportunity to create equity and stability. Owning your own home may be a great way to create equity for the future and provide stability and security for you and your family (provided you stay in it for a number of years and home prices remain relatively stable).

Overall, buying a home can be a good investment but you need to remember you will become your own landlord. You are now responsible for the maintenance and upkeep of your home and property. This also means that:

  • You are responsible for all maintenance costs, from small plumbing problems to major – and costly – issues such as roof replacement and water pipe repair.
  • You will have to budget for all home-related costs, including utilities, homeowner association fees, homeowner insurance premiums, and property taxes.
  • You will have to pay your mortgage and all other bills on time. Paying not only your mortgage, but all your bills on time helps you build and maintain good credit. This is essential if you want to borrow again in the future for home renovations, a new car or student loans.

Due to unforeseen and uncontrollable circumstances, there is also a chance that other risks may arise:

  • You may need to sell your home quickly. Depending on the local real estate market, you might not be able to sell your home quickly, or for the price you seek, and you'll still be responsible for the mortgage.

  • Your property value could depreciate. Your home can lose value for a number of reasons, such as economic conditions, your home not being kept up, or a drop in neighborhood home values.

Be sure to weigh these potential benefits and risks carefully before you start your search.

Read our Executive Perspectives, Myths About Getting a Home Loan in Today's Market.


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