There are a lot of advantages to buying a home. The most obvious is that the monthly payments you make each month for your dwelling would go toward investing in a property that you own, rather than paying monthly rent for a place that you will most likely never own. Before making the decision to move from renting a place to buying a home, it is important to ask yourself a couple of questions to figure out whether or not you are ready to take the plunge.
Questions to Ask Yourself
#1 – Income: Do I have a steady and reliable income?
#2 – Debt: How much debt do I have and is it manageable? (include student loans, car loans and credit cards)
#3 – Affordability: Can I afford to pay a monthly mortgage and other home expenses, such as property taxes, homeowners insurance and repairs?
#4 – Savings: Do I have enough money saved to cover the down payment and closing costs?
#5 – Responsibility: Am I ready for the responsibilities that come with owning a home?
If you answered “YES” to all of the questions above, you just might be ready to buy a home. Speak with your New Bedford credit union to find out if meet all of the criteria required to get a credit union home loan through your local office. Credit union home loans can offer lower interest rates and fees compared to typical loans that come from other financial institutions. Plus, you’ll have the added benefit of financing your new home through your local representative at your New Bedford credit union.
The Advantages of Home Ownership
In addition to the whole rent vs. home ownership advantage, there are many other benefits associated with owning a home. Having a place of your own that you can settle down in, raise a family and become a part of a community, gives you a freedom that you just can’t experience in an apartment or property rental. You can change your home to suit your needs and help grow value in your investment.
Getting a fixed rate mortgage through a credit union home loan at your New Bedford credit union will help you stay on budget compared to rent increases and other cost-of-living increases experienced as a renter or lease holder. As your income increases over time, your fixed rate payments will become even more affordable, giving you more financial security. Buying a home through your local credit union is even easier, with advantages such as lower interest rates and fees that are sometimes available for credit union members.
The tax benefits of home ownership are definitely a huge advantage. Rent is not usually tax-deductible, but mortgage interest on your primary residence usually is. You can even include your purchase points for an even greater tax advantage. Homeowners are typically eligible for significant tax advantages that are not extended to renters. Check with your accountant or tax advisor for details.
The Disadvantages of Home Ownership
For every advantage, there is usually a disadvantage. Of course each of these potential disadvantages may only apply to you if it matches your particular situation. For most home owners, these disadvantages are not an issue. For example, potential loss on your investment due to losses in the real estate market for your area, as well as losses if you fail to make your payments, must also be considered. If you lose your home due to a failure to pay, you could also end up damaging your credit rating in the process.
Making sure you can afford your new home and all of the associated costs, taxes and insurance, is essential to keeping your new home. You may have to pay slightly more for housing as a homeowner than as a renter, due to all of these additional expenses. It is important to weigh the difference in costs to determine whether or not the investment will be beneficial to you and your family.
Repair and maintenance of your new home should also be considered. As a renter you probably never had to think about mowing the lawn, taking care of the landscaping, making repairs to the air-conditioner or heating system and fixing the roof. You just picked up the phone and called the landlord, never thinking about how much it would all cost. As a homeowner you are responsible for the upkeep of your home. Are you ready to take it on?
How to Get Started
Before you begin to shop around for homes in your desired neighborhood or area, make sure to speak with your New Bedford credit union representative about buying a home. They can help give you all of the details about what you need to do to qualify for a credit union home loan and can help you figure out how much money you would need to put down on a home and estimate closing costs. Contact your New Bedford credit union today to find out more about the benefits and advantages of home ownership!