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BUYING VS. RENTING

Actually, if you’re a first time homebuyer, this is an excellent time to buy. Even in these uncertain economic times, owning your own home is still a smart financial move. Read through our guide to find out why.

For most people, a home is the largest single investment you will ever make. Fortunately, if your timing is right and you are smart about how you proceed, it can also be your most profitable investment. And the sooner you make the investment, the sooner you will realize the benefits. If you are paying $1,000 or more in rental right now, chances are good that you can buy a new home and have mortgage payments that are actually lower than your monthly rent. So instead of throwing away money every month, you can build equity in a valuable asset that will continue to appreciate over the years.

1. As you can see, buying is almost always a better option then renting.
2. Buying a home is good if you can find one and handle a payment over $950 per month.
3. For a total payment around $900 per month and possible $16,277 cash equity in the end, The Timberhawk Townhome is an excellent investment.
Call 435-828-6606 today to schedule a showing at a Timberhawk home!
*Monthly payment based on 6.5% interest rate over 30 years. **Assuming 10% appreciation per year

Investing in a Home of Your Own

Most people understand that building equity is better than paying rent. But many are still reluctant to buy a home in our current economy. With daily reports of sky-high foreclosure rates, it’s no wonder many people are hesitant. And, it’s important to remember that home ownership – especially now – is not for everybody. Ask yourself the following questions:

• Do you have enough money saved to cover your down payment (which can be as low as 3% of the purchase price, or as high as 20% for some conventional loans)?
• Do you have a steady and reliable income?
• Do you plan to own your home for at least two years or more?
• Do you have a cushion of at least three months of living expenses saved in case of an emergency?

If the answer to these questions is yes, this might be a great time for you to buy a home of your home.

Mortgage rates remain at historically low levels, which helps keep monthly payments at a manageable level. In fact, if you have good credit, you can get a 30-year fixed mortgage for well under 7.00% APR. In the Intermountain West, home appreciation rates (or the amount a home increases in value every year) have more than exceeded that rate in the past decade. Of course, the slowdown in the housing market has made it unwise to anticipate that kind of gain moving forward, but it’s still important to recognize that your home value may increase, while your mortgage balance goes down. Home ownership is truly one of the few investments that allows you to use and enjoy it while it appreciates.

Another advantage is that your mortgage payment will remain consistent (assuming you have a fixed mortgage), even when your income goes up. Rent prices, on the other hand, continue to rise steadily every year. And with rental vacancies declining, the amount of rent a landlord can charge is increasing sharply. Increases of 10% a year are not unusual, so the apartment that you pay $1,000 for today may be $1,100 in a year, and $1,210 in two years. That’s money you are paying to help somebody else build equity, while you have nothing to show for it.

Groundbreaking Tax Credit

If you still aren’t convinced that this could be the right time for you to buy, maybe a $7,500 tax credit will help you decide. Thanks to new legislation enacted as part of the Economic Recovery Act, first time home buyers or those that haven’t owned a home in at least three years may be eligible for a one time $7,500 tax credit. This extraordinary measure, which makes home ownership a realistic option for many, is a temporary incentive, and virtually eliminates having to pay taxes in the year you buy your house. To qualify, you must purchase your home before July 1, 2009, and have an income of less than $75,000 if single, or less than $150,000 if married.

Supply and Demand

Finally, with the housing boom in the Intermountain West over the past decade, most builders have focused on high-end homes that are well above the median market prices in Idaho and Utah. This has created a glut of homes in the $350,000+ price range, while more affordable homes are still much in demand. With few builders filling the need for smaller and more attainable first homes, the demand has continued to build. This demand is also helping to fuel higher rent prices, as more people hold on to their first homes, and rent them out at rates that cover their mortgages and often yield high profits as well.

What Does This All Mean?

If you are in a stable job and paying $1,000 or more in rent, you may benefit greatly from purchasing a new home. And if you can find a quality, well built home that offers a lifestyle that is good for you and your family, you can bet it will be attractive to others in similar situations. Affordable homes and developments that are thoughtfully planned and constructed, include the most up-to-date conveniences and styles, and are located in desirable and growing areas will always be in demand in the Intermountain West. And this may be your best opportunity ever for buying that type of home.

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