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Delphi Realty Services
36 Garth Road
Scarsdale, NY 10583
Phone: 914-725-8000

Owning your Own Home

For many Americans, owning their own home is the American dream. If homeownership is your dream too, it can become a reality, but not without realistic goals, sound advice, careful planning, and a clear understanding of the costs involved. As in any new endeavor, the more you know about homeownership, the better able you will be to reach your goals.

The decision to buy a home is certainly not one to be made lightly because owning a home requires a significant investment in time, energy, and money. There are many good reasons for buying a home, provided you are ready for the increased responsibilities that come with homeownership.

Advantages of homeownership

A home is a place you can call your own. Perhaps you are ready to settle down in your community and want the feeling of permanence and involvement that comes with owning your own home. Perhaps you need more space in which to raise a family. Or, maybe you want more leeway than you have in a rental unit to adapt your living space to suit your individual taste and needs.

For many people, the motivation for homeownership is financial. Owning your own home is a first-rate investment for a number of reasons.

When you buy a house, your monthly mortgage payments serve as a type of scheduled savings plan. Over time you gradually accumulate what lenders call "equity," an ownership interest in the property that you can often borrow against or convert into cash by selling the house. In contrast, renters must continue paying rent to a landlord for as long as they rent, without the opportunity to build up equity.

Another advantage of homeownership is that while rents typically increase year after year, the principal and interest portions of "fixed-rate" mortgage payments remain unchanged throughout the entire repayment period. Your real estate taxes, utilities and maintenance will go up.

Houses typically increase in value, or "appreciate," over time. In many parts of the country a house that your parents or grandparents could buy for $50,000 is now worth $500,000.

Homeowners also get significant tax breaks. Interest paid on a home mortgage is usually deductible. This alone can save you a substantial amount each year in federal income taxes.

Disadvantages

Higher cost. Even if your mortgage payments are less than you paid previously in rent, you must also pay property taxes, homeowner's insurance, utilities, and upkeep expenses.

Less mobility. A home buyer cannot move after simply giving the required notice to the landlord. If you anticipate being transferred to a new job location within the next year or two, this might not be the ideal time to buy a house.

Increased responsibility. Maintaining a home can involve mowing the lawn, painting, roofing, taking care of needed repairs, etc.

Affordability

When you are convinced that you want to buy a house, you need to consider the finances. You may not want to give up vacations, new cars and luxuries you are used to.

Next

Study this site, especially the section on home ownership. Check your credit. If you have a credit problem, get it fixed before you apply for a mortgage.
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Alex


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