INVEST YOUR RENT: Why Pay Your Landlord’s Mortgage?

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The only one who benefits from a rent check is the landlord. Renters never see that money again, while homeowners usually profit when they sell. In addition, renters can’t use any of their rent payment as a tax deduction, like homeowners can. If you or someone you know is renting, it’s time to put that rent check to better use!e mortgage-interest deduction is probably the best financial argument for buying rather than renting. Consider this example:If you can afford a mortgage payment of $1,000 (principal and interest only), you can buy a house for $151,426 if you put 10% down on a 30-year mortgage at 8% interest ( current rate for great credit is 4%) . If your payments started in January, you would pay $10,862 in interest for the first year in the home. That entire amount is deductible on your federal income tax return! Assuming you are in the 27.5% tax bracket, you would save $2,989 in taxes, or $249 per month. So your $1,000 payment is really only $751 when you factor in the homeowner’s tax advantage.

Can A Renter Really Afford To Buy?

shells5The real question is whether renters can afford not to buy. The tax savings alone make the purchase of a home a wise financial decision. But let’s go a step further.

Using the same example, a 10% down payment would create an immediate equity of $15,142. Assuming the $151,426 house grows in value by just 3% a year, in five years it would be worth $175,544. The original loan amount would then be down to $129,565, yielding an equity of $45,980. In addition, remember the nearly $3,000 tax savings every year. The total value of your equity and tax savings would be almost $61,000 after five years.

Pick A Loan

To take advantage of the financial benefits of homeownership, renters must first find out how much buying power they have. We can help. Call us for information about the whole range of mortgage options now available, including low- and no-down-payment loans, and programs that allow buyers wrap home-improvement costs and closing costs into the mortgage.

Plan Ahead

Although some lenders allow buyers to use up to 41% of monthly income to purchase a house, beware of becoming “house rich and cash poor.” Be sure to budget for homeownership costs beyond the mortgage, including expenses for:

moving
decorating and furnishing
homeowners insurance
property taxes
homeowners association fees (if any)
utilities-power, water, sewer, cable, trash pick-up
yard tools, supplies and general upkeep
home repairs, supplies, cleaning and upgrades.

Today, homeownership is a wonderful dream-come-true for more people than ever before. Let us help turn those dreams into a home to be proud of.

Check out www.cbbaker.com for more information and helpful tips.  kaybakerassociates@ec.rr.com

Categories: Buying Wilmington NC real estate, mortgage interest deductions, tax advantage, tax advantages to buying real estate, tax exemptions, why pay your landlords mortgage, Wilmington NC Neighborhoods, Wilmington NC real esatate

RESALES: Hidden Advantages Of Previously Owned Homes

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Although many people prefer to buy new homes, the vast majority of buyers prefer resales. According to the National Association of Realtors, 75% of homes sold are resales.When home buyers ask us about the merits of buying an “old” versus a newly built home, we show them how resales offer some of the best values in the market today. The news gets better when they see the wonderfully diverse resale selection of appealing styles and sizes in may locations and price ranges. Plus, when the owner goes to sell an “old” home, they have what most buyers are looking for.

Here are some of the advantages that make “old” homes so popular:

Size Appeal

Older homes often have more space inside and out than new homes. Inside, resale homes may have more square footage and higher ceilings; outside, resale lot sizes are typically larger.

Close-in convenience

Many resale homes are in older neighborhoods, which are closer to downtown business districts and shopping. New communities are often a distance away from cities and commute times may be much longer.{short description of image}

Cost savings

Resale homes generally are less expensive than similar new homes. One reason could be that resale sellers have more bargaining room than builders who must make a return on the high costs they recently paid for land and building materials. In fact, a NAR study found resale sellers accepted a median drop of $4,000 from their asking price while builders’ median drop was only $500.

More green space

For tree lovers, resales are a big draw. Older homes typically have mature trees and plantings, unlike what’s found in new neighborhoods.

What you see is what you get

There is no guesswork with older, established neighborhoods. Buyers can research and tour the schools, sample the shopping, and check out the neighbors. In a new-home subdivision, buyers might not want to live with the noise and dirt of construction, may wonder about future development, or deal with possible long bus rides to existing schools and little or no nearby shopping.

Lots of Extras

Many resale buyers cash in on “extras” the owner has already put in, which can save big money. Typical money-saving extras: fenced yards, decks, pools, play sets, window treatments and appliances.We would be happy to assist you with your house-hunting needs. A resale home can be an excellent value for a buyer in today’s market. Call or e-mail for more information.”

 

Categories: Wilmington NC Neighborhoods, Wilmington NC real esatate, Wrightsville Beach NC


Kay Baker Associates | 1001 Military Cutoff | Ste 101 Wilmington, NC 28405 | kaybakerassociates@ec.rr.com | 910-202-3607 | Fax 910-338-2428

Copyright © 2017 Wilmington NC Real Estate Guide. All rights reserved. Disclaimer: All content on this blog is my own opinion and should not be treated as fact or relied upon when purchasing or selling real estate.