November 2nd, 2018 8:48 PM by Chris M Caggiano MLO
A Qualified Mortgage Consultant Can
Outline Your Options
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 on your way toward building
equity. 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 lower than the rate you’d currently be locked
in at, and this would cause your monthly mortgage commitment to go down.
And not only would your own
home give you added space, your own back yard and overall privacy—home
ownership would also give you some tax advantages. 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.
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