1. MAKE SURE BUYING A HOME
MAKES SENSE FOR YOU
Renting Vs. Owning With mortgage rates at their 20
year low, it might make sense for a renter to consider purchasing
a home. Often times the mortgage payment will be equal to
or less than the rental payment. A portion of every mortgage
payment is applied towards principal thus resulting in a built
in savings plan.
Downpayment The downpayment is the amount of money
a buyer needs to pay toward the purchase of a home. This
amount is a percentage of the purchase price. The minimum
downpayment is typically between 3 to 5%. A downpayment
of 20% or more will eliminate the requirement of private
mortgage insurance. Private mortgage insurance (PMI) insures
the lender in the event of borrower payment default. There
are options of putting down 10% and avoiding private mortgage
insurance. One of these options is called an 80/10/10 loan.
Keep in mind a portion of the downpayment may be made in
the form of a gift. Lenders have specific gift guidelines
on how much may be gifted and from whom.
Tax Benefits The interest portion
of a mortgage payment will have tax deduction benefits.
In order to find out specifically what your tax deduction
might be, you need to consult your tax advisor.
|
