5 Things You Should Know Before Buying a Home
For most Americans, buying a home is the single largest purchase they will ever make. There are many popular beliefs around making this decision, but because it is such an important one it is worth examining which are true and which are false. Here are five common home buying myths that we want to dispel.
- It’s Better to Buy: Young Americans are encouraged to buy homes as early as possible because of the investment aspect of purchasing property. But it usually takes at least five years to see any return on investment in property, so renting would be advisable over buying if the likelihood of moving in a few years is high.
- Choose the Lowest Lender: On the surface, choosing a mortgage lender with the lowest interest rate seems to make sense but if you dig a little deeper, you will find that choosing a disreputable lender can cause problems. In today’s competitive housing market, many sellers will choose a buyer working with a lender they can trust.
- The 36% Rule: It is a common adage that if your total debt payments are less that 36% of your income, you will be able to afford them. This rule, however, is not fail-safe. It is wise to track your expenses for a period of time to see what you will realistically be able to put towards a mortgage payment.
- Mortgage Interest=Tax Write-Off: While you may be able to write off part of your mortgage’s interest as a tax deduction, there are limits. To get a tax write-off, your mortgage interest plus your other itemized deductions must be more than $6,100 or $12,200 annually. Only the amount over that number will count towards your taxes.
- You Know The Cost: When considering buying a home, most people calculate the expense of the home itself, the interest, the taxes, and the insurance. However, the actual expense will often be greater than that, considering that homeowner’s association fees, utilities, and moving expenses will immediately come into play.
Looking for someone to guide you as you make this significant decision? Turn to The Barr Team, located in Irvine. Our licensed, caring team will be thrilled to come alongside you to help you move into your dream Southern California home. Contact us today to begin the exciting home buying process with expert guidance.