Should I buy a home or continue renting?
A home is one of the best investments you can make. Having a home to call your own is a wonderful feeling. You’ll enjoy privacy, a yard for your kids and pets, and the ability to add your own personal touch to your individual lifestyle needs.
Owning a home comes with personal satisfaction and financial benefits. Mortgage interest and property taxes are all tax deductible. It's true that when you rent you do not have to pay property taxes, but the tax benefits received from owning a home in most cases is greater than the taxes paid, therefore the principal and interest payment is equal or less than the cost of a typical rent payment today.
For example, if you rent an apartment for 10 years at $1,000 a month, you will have paid $120,000 for it and have nothing to show in return. After just 10 years of paying $1,005 on the principal and interest for a home priced at $170,000 with 5.875% interest rate you would have paid $28,211 in principal and $92,461 in taxable interest. In addition, your home may appreciate 5 to 10% annually. On a $170,000 home that would be from $8,500 to $17,000 a year in appreciation alone. So, not only could you be living in a 3 to 4 bedroom home with a game room, media room, and yard, but also you would be making money each year in appreciation. This is equity that you can borrow against if needed so it can be a great savings plan for you.
How much difference does a large down payment make? Top
For each $1,000 you put down, your payment is reduced by $8.00. For example, for a $10,000 down payment, the mortgage goes down $80. For some homebuyers, it is better to use the money to pay off other debt rather than use it for a large down payment. You could use a different loan program and interest rate rather than put down more money. Often you can put down 1% or 2% of the amount borrowed to buy points that will lower your payment for 30 years rather than use the money for a larger down payment.
How much money will I need at closing? Top
The cash required at closing depends on the type of loan you choose. In most cases, you need the cash for the down payment, which is usually from 5-20 percent unless you can get a gift for the down payment. The closing costs, title policy, and origination fee adds up to approximately 3% of the amount borrowed, and the escrow or pre-paid fees are typically 2% of the amount borrowed.
A quick rule of thumb is to figure 5% for both the down payment and the costs associated with closing which adds up to 10% of the amount borrowed. Builders will sometimes pay up to 3% for closing costs in lieu of other promotions and lenders may pay 2% for escrow if you take a little higher interest rate. Ultimately, you could move into a new home with a 5% down payment if your have good credit.
Should I wait to buy a home if I currently have debt or bad credit? Top
There are many financing programs available today for people with bad credit. If you can qualify with your current debt situation, it is better for you to buy now since this investment is likely to go up. If you wait to buy when you are out of debt, chances are you will never do it. Plus, you can end up paying more for the home, and the interest rate may be higher. The end result could be more debt than if you purchased sooner.
What are the tax advantages to owning a home? Top
Purchasing a new home is one of the smartest buys you can ever make. Homeownership has many positive tax implications. The government allows you to deduct a portion of your mortgage interest along with the amount of your property taxes. The amount deductible depends on your tax bracket, but it is usually more than the monthly taxes paid. So once you factor this amount, your total monthly principal and interest payment on your home can be less than your rent payment.
What are the expenses associated with a mortgage loan? Top
Lenders charge 1% of the loan amount as a fee for originating the loan. This fee may be waived when you pay a slightly higher interest rate. The title company charges .9% of the price for the title policy which insures that the property is free and clear of liens. Closing costs can vary from lender to lender, but are about 1% of the loan amount, which can include attorney fees, courier fees, etc. If your down payment is less than 20%, the lender will collect an escrow amount which includes 3 months of taxes, 14 months of home owner insurance, 2-3 months of association dues, and interest on the loan depending on the day you close. The origination fee, discount points, interest paid, and property taxes are all tax deductible. Stop by today to have a Grand Home Sales Associate run the tax benefits of Grand Homeownership for you.
Why should I buy a new home versus a pre-existing home? Top
As a homebuyer, you have two options—buy a new or pre-existing home. It’s a decision that conflicts many people looking for a home. They wonder whether it’s better to buy an older home and renovate or build a home from the ground up. It’s a serious question for a homebuyer especially with interest rates as low as they are today. Here are numerous advantages to buying a new home:
Buying a new home is more cost effective in the long run not to mention the resale value and appreciation usually increases the most in the first few years in a home’s existence. The first six to eight years are usually the formative years where the most appreciation occurs. During this time, a new home can have the most appeal and grow with the economy and the surrounding area.
Know the Builder
Ultimately, the quality of a home depends on the quality of your builder. We pride ourselves in being the only builder in the area that has its own Quality Inspection Team to provide you with a superior product. Our program exceeds not only the City’s standards, but also the competitor’s standards as well. We are committed to meeting our customer’s needs and it shows with our reputation for quality designs and products that brings our homeowners back for their second Grand Home.
New homes require little maintenance compared to pre-existing homes. When buying a used home, you may end up replacing or repairing the roof, wiring, water heater, flooring, appliances, countertops, and many times the air conditioning and heating unit. New exterior and interior paint as well as carpet are usually a must with used homes. These costs can range anywhere from $25,000 to $50,000 just to try to make the home feel new.
First of all, with a new home that’s just it...it’s NEW! You’ll be the first to cook a meal in your kitchen, watch T.V. in your media room, and take a bubble bath in your new whirlpool garden tub. You can choose from an array of designs that meet the needs of today’s families. Grand designs offer spacious kitchens that open to family rooms along with game rooms, media rooms, studies, separate one car garages for storage or workshops, children’s retreats, and much more. New homes allow you to customize the décor with your choice of colors, countertops, cabinets, flooring, brick, paint, etc.
Quality Construction, Efficiency, Safety
Construction techniques and materials used today are a significant improvement over those in the past decade. New homes are being built better than ever before. The materials used today are highly efficient and durable and often look better. Today’s homes are wired with the latest technology and offer healthier living environments. In addition, our homes go through rigorous inspections by City Inspectors as well as Grand Homes’ own Quality Inspection Team. New homes are also much safer than older homes. The risk of dying in a home fire is much less due to several factors that include hard-wired smoke detectors, more efficient heating systems, better insulation, and proper electrical systems. New homes are also built with products and systems that are better for your health than their older counterparts.
A new home comes with peace of mind. A two-year warranty from Grand Homes covers the plumbing, electrical, and HVAC along with a ten-year warranty on the foundation. The appliances are covered under manufacturer warranties as well.