If you're a first-time home buyer you've probably had friends, family and coworkers attempt to advise you on the best reasons to purchase a home. However, you may still be wondering if buying a home is the right move for you. This is a valid concern and having reservations about purchasing a home is normal. However, the more you understand about the home-buying experience, the less intimidating the entire process will be.

 

Listed below are 10 good reasons why you should purchase a home: 

 

The American Recovery and Reinvestment Act offers an $8,000 dollar tax credit for aspiring first-time (within the last three years) home owners who find their goal stubbornly elusive. But, like so many of the good things in life, time is of the essence. Buyers who wish to take advantage of this outstanding opportunity to get 8 grand back from the government must purchase a primary residence on or after Jan 1, 2009 and before Nov. 30, 2009.

 

 

 

Who Qualifies?

First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

 

Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

 

How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

 

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.

 

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

 

Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

 

  State Housing Initiatives Partnership (SHIP)

 

 

 

Unlike most things one may purchase with their money - cars, boats, stereo equipment - a home will not usually depreciate in value over time. In fact, real estate has proven to be one of the most valuable investments a person can make and owning land is still one of the few ways to acheive true wealth. By purchasing a home and investing in that property you will not only be providing a stable environment in which to grow and mature but you will also be sewing the seeds of financial independance. Although real estate moves in cycles, sometimes up, sometimes down, over the years, real estate has consistently appreciated. Many people view their home investment as a hedge against inflation.

 

 

Pride of ownership is the number one reason why people yearn to own their home. It means you can paint the walls any color you desire, turn up the volume on your MP3 player, attach permanent fixtures and decorate your home according to your own taste. Home ownership gives you and your family a sense of stability and security. It's making an investment in your future.

 

 

Home ownership is a superb tax shelter and our tax rates favor homeowners. As long as your mortgage balance is smaller than the price of your home, mortgage interest is fully deductible on your tax return. Interest is the largest component of your mortgage payment.

 

IRS Publication 530 contains tax information for first-time home buyers. Real estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes. In California, the passage of Proposition 13 in 1978 established the amount of assessed value after property changes hands and limited property tax increases to 2% per year or the rate of inflation, whichever is less. Click here for more info.

 

 

If you receive more profit than the allowable exclusion upon sale of your home, that profit will be considered a capital asset as long as you owned your home for more than one year. Capital assets receive preferential tax treatment.

 

 

As long as you have lived in your home for two of the past five years, you can exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains. You do not have to buy a replacement home or move up. There is no age restriction, and the "over-55" rule does not apply. You can exclude the above thresholds from taxes every 24 months, which means you could sell every two years and pocket your profit--subject to limitation--free from taxation.

  

 

Each month part of your monthly payment is applied to the principal balance of your loan, which reduces your loan obligation. The way amortization works is that the principal portion of your principal and interest payment increases slightly every month. It is lowest on your first payment and highest on your last payment. On average, each $100,000 of a mortgage will reduce in balance the first year by about $500 in principal, bringing that balance at the end of your first 12 months to $99,500. It is advisable to pay extra on your mortgage every month and specify that the extra amount goes to pay down the principal. This way you can pay off your mortgage in less time, saving you thousands of dollars in interest charges over the life of the loan.

 

 

Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 22%. Equity loan interest is often much less and it is deductible. Consumers can borrow against a home's equity for a variety of reasons such as home improvement, college or medical bills. Some state laws restrict home equity loans.

 

Now is an amazing time to buy real estate, especiall in Florida. If you are interested in purchasing a home for the first time please give us a call and we'll be more than happy to answer any and all questions you may have.