Why You Should Buy Instead of Renting

Buying a home can be a scary process if you've never done it before but the benefits certainly outweigh the initial fears you may have about the idea of home ownership. Sadly, many renters are afraid to take the plunge until much later in their lives and later find out about all the benefits of home ownership that they could have benefited from.

First, home ownership lends many tax benefits to you. For example, in New York State you are eligible for the STAR program which means you can save hundreds of dollars a year on your school taxes. Additionally, there are certain other costs associated with owning a home like the interest you pay on your mortgage that can also be written off on your annual income tax. Consult with a tax or accounting professional for more details on the tax benefits of home ownership.

Next, any improvements you make to your home will benefit you in the future when you sell your home. When you are renting a home you aren't going to receive any discounts or money back from improvements you made to the property and the landlord isn't required by law to repay you for the improvements.

Lastly, financing options have never favored first time home buyers more than they do today. Take FHA loans for example. An FHA loan is a home loan insured by the federal government's Federal Housing Administration. FHA loans allow you to purchase a home or condo with just 3.5% down payment as opposed to the more traditional 5% - 20% down payment required.

There is also a tax credit of up to $8,000 available to first time home buyers who purchase their first home before the end of November 2009. You don't have to repay the tax credit and you will receive it on your 2009 income tax regardless of whether you owe taxes to the government or not. Again, consulting with a tax or accounting professional will give you the most concise explanation of how this tax credit can benefit you.

Another significant milestone in today's real estate market are the sheer number of builders and sellers offering closing cost assistance to make home ownership more attainable. Let's say you were purchasing a new home with an FHA loan and were putting 3.5% down. Now say the builder were offering to give you $10,000 towards your closing costs. If the closing costs are $15,000 (purely hypothetical) then you would only need to come up with $5,000 to pay your closing costs since the builder is paying for the other $10,000!

Purchasing a home in today's market makes more sense than ever before given the low interest rates and newly bolstered first time home buyer options available to you. When looking for your next home just bear in mind that condominium communities need to be FHA approved before you can easily use an FHA loan to purchase a home in that community. Single family homes face less restrictions by the FHA but are often more expensive than their condominium counterparts.

The best way to understand your true buying power is to contact a mortgage professional at your local bank or credit union.