Thinking Of Buying Your First Home? Eight Reasons Why You Should Own!
Friday, January 15, 2010
If you are like most first time home buyers, you have probably wondered what is the big deal of owning the place where I lay my head to sleep? You have probably had family members and a number of your friends telling you that you should stop making your landlord rich and to go out and mortgage yourself to the hilt in the name of ownership! But you are intimidated.
To help you get over your reservations, below are eight sound reasons why you should buy your home NOW:
Appreciation
Real estate, like many things, has its ups and downs. However, over the years, real estate has consistently appreciated. Many of us consider our homes as a savings account, part of our retirement, and a hedge against inflation. In fact, if you were to go to The Federal Housing Finance Agency’s website (http://www.fhfa.gov) and look at their House Price Index, you will find that, in general, since 1995, the average home in Georgia has appreciated 67* percent!; since 2000 the value has gone up 24* percent!
*compared with FHFA assessment of value as of 2nd quarter of 2009; (values started rising again in the 3rd quarter); Also know that the Atlanta region was not as negatively affected with the 2008/2009 downturn as badly as the entire Georgia region;
Capital Gain Exclusion
If you live in your home for two of the previous five years, you can exclude from taxes up to $250,000 for an individual, and $500,000 for a married couple filing jointly, of the profit/gain when you sell your property! You do not have to reinvest the cash you get from a sale to avoid/defer taxes! There is no age restriction! You could, subject to some limitations (see your CPA), buy your ‘primary’ home and sell every two years and pocket your profit tax free!
Equity Loan Vehicle
Got credit cards? They charge interest on outstanding balances from 16% and up, and you cannot deduct the interest expense on your tax returns. Not so with an Equity Line! Many of us have taken out Equity Lines and then deduct the interest (which is typically much lower) on our tax returns. Valid reasons for Equity Lines include: school tuition, home improvements, medical emergencies, and opening your own business. Your lender will require a new appraisal be completed which shows you have built up the necessary equity to warrant an Equity Line. Another reason for making as large of a down payment as possible when you first buy!
Mortgage Interest Deduction
Your home mortgage is fully deductable on your tax return. Interest is the majority of your monthly mortgage payment!
Pride of Ownership
The number one reason people buy their first home and continue to own from that point forward? Pride of Ownership! Owning your own home gives you a sense of stability and security. You can also do what you want with the interior, and barring Deed restrictions or Homeowners’ Association Rules, play loud music to your heart’s content and/or paint the exterior to suit your taste! Feeling good also means you made an investment in your future!
Property Tax Deductions
Yes, you do have real estate taxes to pay when you own your home. But, the real estate taxes paid are fully deductable for income tax purposes!
Federal Tax Credits
Up to an $8,000 credit for purchasing your first home. WOW! BUT - you must be ‘Under Contract’ no later than April 30, 2010 and close the transaction by June 30, 2010.
Value
With the recent ‘correction’ the real estate market has experienced, you should be confident that you are buying a property for a value that will only go up!
Posted in: Intown Atlanta Real Estate News