For most people, buying a home is one of the most important decisions of their lives.
The decision is not usually an easy one. Here are 10 good reasons why we think buying a
home is one of the best investments you make.
It will be yours and yours alone.
The freedom of owning your own home can't begin to compare to the restrictions that
renters experience. You can paint the walls the color you like. Hammer a nail where you
want. All without hassle from a landlord.
Lifestyle.
Home owners are a different breed. When you live in a neighborhood or building that
is basically owner-occupied, your neighbors, like you, have invested in and care about
their property. Quite naturally, they're willing to invest more of their time, money, and
efforts to improve their property and community--which, in turn, improves the value of
your property!
Equity buildup.
Rental payments are gone, once you have made them. But, with each mortgage payment,
you are "buying" something tangible, building up equity. The longer you own your
home, the larger your equity.
Keep up with inflation.
A home is an investment that helps you keep up with inflation. Although not all
homes appreciate at the same rate and some years are better than others, real estate has
historically kept pace with and usually appreciated faster than the rate of inflation.
Income tax benefits.
Under current law, all interest paid on certain qualifying mortgages incurred in
buying a home is deductible for tax purposes. And in the early years of your mortgage,
most of your payment is interest. Remember, too, that real estate taxes are still
deductible.
Payback on improvements.
A renter who makes any property improvements gets no financial benefits from them
if he or she relocates. But as a home owner, you can realize some or all of the cost of
improvements when you sell your home.
Trade-up value.
Even if your first home isn't your "dream home," you will be working your
way up to it when you buy any home. With appreciation and possibly some improvements, it
may provide you with enough equity to make a down payment on your dream home later.
Security for retirement.
Unlike rent, which goes on forever, the mortgage on your home will be paid some
day, providing you with "rent free" living for your retirement.
Investment property.
For some, second single-family homes or condominiums are proving to be good income
investments and tax shelters. You will be realizing profits and tax benefits from renters
who don't yet know the benefits of owning a home.
Don't let the mortgage interest rate fool you.
You will pay less in interest than the mortgage rate of your loan, because the
interest you pay becomes tax-deductible. To get a rough idea of what "effective"
interest rate you will pay, see the chart below.
| |
Mortage Interest Rate |
| Taxable Income |
8.0% |
9.0% |
10.0% |
11.0% |
12.0% |
14.0% |
| $20,000 |
7.0% |
7.5% |
8.5% |
9.5% |
10.0% |
12.0% |
| $25,000 |
7.0% |
7.5% |
8.5% |
9.5% |
10.0% |
12.0% |
| $30,000 |
7.0% |
7.5% |
8.5% |
9.5% |
10.0% |
12.0% |
| $35,000 |
6.5% |
7.0% |
8.0% |
8.5% |
9.5% |
11.0% |
| $45,000 |
6.0% |
6.5% |
7.0% |
8.0% |
8.5% |
10.0% |
| $60,000 |
6.0% |
6.5% |
7.0% |
8.0% |
8.5% |
10.0% |
| $85,000 |
5.5% |
6.0% |
6.5% |
7.5% |
8.0% |
9.5% |
| $100,000 |
5.5% |
6.0% |
6.5% |
7.5% |
8.0% |
9.5% |
Based on 1990 tax rates for married
filing joint itemized return. If single, figures are .5% to 1.5% percent lower than shown.
Selecting your title insurer.
And you'll want to protect the title to your property with title insurance from
Attorneys' Title Insurance Fund, Inc. ("The Fund") through its agent Legacy
Title Services, Inc. The Fund is the foremost name in title insurance within the State of
Florida. You want to be sure that you have a good title, free and clear of any claim that
might possibly affect your ownership in the future. A title insurance policy insures your
rights as a home owner. Should a claim ever arise against your title as insured, The Fund
will immediately arrange for legal counsel to defend your title, in court if necessary,
completely at its own expense. Should the claim be valid and a loss sustained, it is paid
by The Fund up to the full value of the policy.
