* Homeownership can help make good credit even better. If your credit
is in poor shape, you’ll want to monitor it before seeking a mortgage.
But if you have good credit, live within your means, and consistently
make good financial decisions, a mortgage can be the kind of “good debt”
that helps your overall financial health. Making regular payments on a
mortgage shows potential lenders that you’re a less risky candidate for a
home loan. Before you begin home shopping, it’s a good idea to check
your credit. Enrolling in a product like freecreditscore.com can help
you better understand and leverage your credit.
* A mortgage can function like an automatic savings plan. By now,
you’ve read the news reports about how little we Americans save these
days. Well, every year you pay on your fixed-rate mortgage, is a year of
building equity, and equity is like money in the bank. When it’s time
to sell – whether you’ve stayed in your home seven years or the full 30
year term – you’ll have created equity and should be able to sell your
house for more than you owe.
* Homeownership comes with plenty of financial perks, including an
income tax credit for property taxes you pay on your home. For detailed
information on tax breaks check out IRS.gov. Buying a home also affords
you the opportunity to halt your housing costs. Rent will always go up
from year to year, but if you have a fixed-rate mortgage (avoid
adjustable rates) your biggest annual expense – housing costs – will be
locked-in.
* Mortgage interest is a good deal when stacked up against other types
of interest that don’t do much for you – such as high credit card
interest rates or low rates on savings accounts and CDs. Mortgage rates
are low right now, meaning you can pay less over the life of a loan than
at practically any other time in recent history. Plus, it’s the only
kind of interest that you can deduct from your taxes.
* Prices are still relatively low and inventory is high. It’s been a
buyer’s market for a long time, but that’s going to change. The question
is: when will the market start to improve in your area, taking home
prices with it? You’ll have to do some legwork and astute research to
determine when is the best time for you to buy.
If you monitor your credit and are on a sound financial footing, buying
a home can still be a good idea. And now is as good a time as any to
make your purchase.
Courtesy of BPT
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