It’s usually a sound idea to gather all the facts before making a decision, especially a decision of this magnitude. Buying a home is generally the largest financial transaction the average person makes in a life time. So if you’re thinking of buying a home in Portsmouth, New Hampshire or anywhere else along the New Hampshire Seacoast, here are some facts to consider.
The predominant majority of today’s renters respond positively to the question: ““regardless of whether you think you can afford it, would you like to own a home someday, or would you prefer to continue renting?”. 85% of respondents answered “Yes” to this recent question in the New York Times.
Other researchers pooled National Housing Survey data from 2010-2012 and found that fully 94 to 95 percent of people between the ages of 18 and 44 expected to buy a home of their own someday.
Here are some reasons other than the lowest interest rates in history why buying now is a good idea.
1. Buying a home is typically the only leveraged investment available.
““Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”
2. You’re paying for a home whether you own one or rent one.
“Homeowners make payments on their own home. Renters make payments toward their landlord’s investment properties.”
3. Buying a home for yourself is usually a “forced savings” plan.
“Most people have trouble saving money and have to make a house payment one way or another. Buying forces you to invest in your home via the monthly payments.”
4. There are still substantial tax benefits to buying a home.
“Homeowners are able to deduct mortgage interest and property taxes from income…On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”
5. Owning a home is a hedge against inflation and rent increases.
“Once you own a home with a fixed rate mortgage your principal and interest payment never go up over the life of your loan. Rents almost always go up; sometimes dramatically plus you’re at the mercy of your landlord if he decides to sell his investment or evict you. And historically owning a home has outperformed the stock market over time.”
So there are some things to consider while deciding whether buying a home in Portsmouth NH or the New Hampshire Seacoast is a good idea for you.
If you would like to sit down with my partner Ann Cummings and I to talk about how you can own your own home for probably less money than you’re thinking, just give us a call or email. No cost and no obligation. Call Ann direct at 603-501-3839 or Jim direct at 603-501-5801. email Ann@AnnCummings.com or Jim@JimLee.com
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