Homeowner: Pros And Cons Being First Time Home Buyers

If you are thinking of purchasing your first home, there are many questions that might face you.  You may get many feedbacks and opinions from friends, family, and co-workers about the advantages and disadvantages of buying a home and being a homeowner and you might also hear the horror stories in the press about the sky rocketting foreclosure rates and homeowners owning homes that are underwater, where their mortgage balances are higher than the market value of their homes.

Biggest Benefits Of Being Homeowner Versus Renter

In my personal opinion, I think that the advantages of being a homeowner outweight the disadvantages.  Many renters do not realize that sometimes owning a home cost less than renting in many cases.  Many renters think that they need stellar credit and a large down payment in order to become homeowners.  This is not the case either.  Renters with credit issues may be required to put two or three months security deposit to rent.  Many times the down payment on a home purchase is either equivalent to the security deposit or less.  To qualify for a FHA home purchase, you only need 3.5% down payment and many times, you only need to show the 3.5% down payment and can use the seller’s tax proration credits towards your down payment.  How about closing costs?  You do not have to pay for closing costs as long as you can get a sellers concession towards a buyer’s closing costs and/or a lenders credit towards closing costs.

Benefits Of Homeownership For First Time Home Buyers

The benefits outweigh the disadvantages of being a homeowner for first time home buyers.  Yes, there are disadvantages of being a homeowner like being responsible for maintenance, repairs, and the lack of mobility in moving whenever you want and needing to sell your home in order to make a move elsewhere.  However, the pride of homeownership outweighs the cons.  For example, you can paint and decorate your home without having to get permission from the landlord.  You can have a pet or pets without asking for permission or having to put an additional security deposit.   You will be secure in your home where you do not have to fear the landlord threatening you that he will not renew your lease.  You will no longer have annual rental increases.  Advantage of being a homeowner is that your mortgage payments will be fixed for the 30 years of the loan term.  Your property taxes and increase might increase but your mortgage payment will remain constant for the life of your mortgage loan if you have chosen a 30 year fixed rate mortgage loan.  Being a homeowner comes with tax benefits.  Your mortgage interest is fully tax deductable on your annual tax returns.  Mortgage interest is the largest portion of your monthly mortgage payments.

Appreciation Potential For First Time Home Buyers

First time home buyers are in a situation now where there are many of homes that are selling below replacement value due to the real estate and mortgage collapse of 2008.  First time home buyers have an opportunity to get on the ground floor on their home purchase and realize potential capital appreciation on their home purchase.  First time home buyers should realize that millions of homeowners are still hanging on their homes that are worth less than the mortgage balance they owe.  Nobody can predict the future but first time home buyers have excellent odds that their home purchase will appreciate in value.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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