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Top Five Factors to Consider Before Buying a Home

On an economic perspective, are you ready to own a home? For some potential home owners, they think that buying a home is all about just paying the upfront cost of their home. However, there is more to buying a home than just that. Buying a home could mean saving your money for its down payment, future repairs, and maintenance costs, paying for monthly ownership costs, and more. If this is your first time buying a home, having a better understanding of the many factors that come into play in buying a home can help you make better decisions now and in the future. This short article will give you the top five factors worthy of consideration before you buy a home.

1. Tax deductions: Tax deductions associated with home ownership are a reality even if you are part of the regions or states that have less deductions because of high SALT. With local and state taxes, there is still up to $10,000 worth of tax deduction from your federal tax returns. So, if you are weighing the benefits of buying and those of renting a home, this factor should be considered. Once you compare the net numbers of both scenarios and find that they are just close, you will soon realize one thing. Home ownership is a more economically sound decision with its potential for equity and appreciation.

2. Mortgage and mortgage interest: In terms of your mortgage interest, even if it is $1 million in amount, it is still deductible by tax. This means that again, before buying a home, you must consider this factor carefully. Additionally, you should be able to determine if your monthly costs can stay within your comfort zone and will be able to let you enjoy both your home and money still.

3. Local real estate market: Every area, city, or state will have their own trends in their real estate market. One local real estate market might depreciate less while one local real estate market might appreciate more. Before buying a home, you should be able to look into the location of the property if it is able to meet with your preferences, requirements, and wants. Keep in mind that buying a home requires more commitment than plainly renting one.

4. Competitive market analysis: As a home buyer, you should not easily buy a home if you have not considered intently if its price is worth paying for. It is highly recommended that you seek out a professional real estate agent who can prepare an in-depth competitive market analysis for you so you will know if buying a particular home is really for your best interests.

5. Matching of house assessment and house value: If you will be buying your home through a mortgage, you need to understand that you will not get any money if no proper assessment of the property is done. Simply put, mortgage lenders will never lend you money on all the things that you will be paying for your new home but just with the assessed value of your home. Thus, if the property does not have a high value as per assessment, you may have to pay a bigger down payment for it. Now, the next question will be, do you have enough resources and reserves for it?