HOMEOWNERSHIP

WHAT ARE SOME ADVANTAGES OF
HOMEOWNERSHIP AND IS IT RIGHT FOR YOU?

Homeownership has many advantages - both financial and personal. But buying a home is an important decision. Look at the benefits and the differences between homeownership and renting to better understand if owning a home is right for you.

What are some benefits of homeownership

Now, if you really want a more in-depth understanding of the factors that affect interest rates on a daily basis click on The Expert's Guide to Mortgage Interest Rates.

• Tax savings:

  You may earn significant tax savings because you can deduct mortgage interest and property taxes from your federal income tax and many states' income tax if you itemize your deductions.

• More stable monthly housing expense:

  Your monthly housing loan or mortgage expense can remain the same for the life of your mortgage, depending on the type of loan you choose.

• Equity:

  You may build equity in your home over the life of your loan, which allows you to plan for future goals like your child's education or your retirement.

Homeownership is not right for everyone. It may not be the right time in your life or you may not like the commitment associated with owning a home.

What are some differences between renting and homeownership:

• Renters are typically free from maintenance obligations such as repairs or lawn care.
• Homeowners often have more freedom in decorating, landscaping, etc.
• Renters can move more easily and more quickly than homeowners and there are higher costs associated with buying and selling a home.
• Homeowners have a financial investment and may build equity in their home.

What are some myths of homeownership

Lenders evaluate mortgage applications a lot differently today than they did even 10 years ago. And even more has changed in the last 20 years. What used to close the door to homeownership may not be a factor today.

Myth:  You need great credit to become a homeowner.
Fact:  You may still be able to buy a home with less-than-perfect credit. And remember, you can improve your credit over time.

Myth:  You need to put 20% down to buy a home.
Fact:  There are many types of mortgage products and programs that allow low and no down payments. But remember to factor in other costs such as closing costs, property taxes, moving expenses, and repairs.

Myth:  You can't buy a home in the U.S. if you're not a citizen.
Fact:  If you're a legal resident, you can purchase a home in the U.S.

Myth:  If you don't have a bank account or credit cards, you can't qualify for a mortgage.
Fact:  Having a bank account is always a good idea and helps you establish credit. However, lenders can approve you for a mortgage even if you don't have a bank account or credit cards. You'll likely need to keep records showing a history of payments you've made for items such as rent, utilities, and car payments.

Myth:  Lenders share your personal financial information with other companies.
Fact:  By law, banks and other financial institutions are restricted in their uses and disclosures of information about you. In some situations, you may choose to restrict the disclosure of your information if you don't want it to be shared.

Myth:  If you're late on your monthly mortgage payments, you'll lose your house.
Fact:  If you have a financial hardship, like the death of your spouse or a medical emergency and fall behind, it's possible to keep your home and get back on track if you contact your lender early.

Myth:  You can't get a mortgage if you've changed jobs several times in the last few years.
Fact:  Not true. You can change jobs several times and still get a loan to buy a home. Lenders understand that people change jobs. The important thing is to show that you've had a stable income.