Buying vs Renting

Is now the right time for you to buy a home? You have many options to consider and choices to make. Buying a home is a big responsibility, financially and emotionally, but most people want to own a home. Homeownership often is referred to as"the American dream." Why is it so special? Among the reasons: Real estate often is an excellent investment, perhaps the number one
source of wealth-building for families. Owning a home has many benefits. When you make a
mortgage payment, you are building equity - and that's an investment. Owning a home also qualifies you for tax benefits that may assist you in dealing with your new financial responsibilities - such as homeowners'insurance, real estate taxes, and upkeep - which can be
substantial. But given the freedom, stability, and security of owning your own home, they are definitely worth it! Owning your own home also can be a great source of pride and stability.
But homeownership may not be for everyone. It's a big financial commitment - starting with the initial shock of your purchase (including a "down payment" and fees paid to a real estate agent, the lender and others) followed by years of monthly mortgage payments, real estate taxes, property insurance and maintenance costs. When you decide to purchase a home, you
accept responsibility for paying for these expenses. They are additional costs to your monthly mortgage payment and should be included in your budget estimates:
Property Taxes and Special Assessments
Home/Hazard Insurance
Utilities
Maintenance
Home Owner Association (HOA) Fee if applicable.

One of the advantages of renting is being generally free of most maintenance responsibilities
and the flexibility of moving almost as soon as you decide. But by renting, you lose the
chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for your housing needs. There are many considerations in choosing between renting and buying:
There are tax advantages to homeownership in both the short and long terms. The mortgage interest and real estate taxes are tax deductible, which allows you to subtract part of your housingrelated expenses from your taxable income, which could reduce your tax bill. In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant. Do you want to spend several years in a house and in a neighborhood?
Do you enjoy lawn and garden work? Might you need to move suddenly to care for family?
Do you want to keep your assets accessible in the bank, or do you want to invest long-term in a home?

Lender Checklist: What You Need for a Mortgage

□ W-2 forms — or business tax return forms if you're self-employed — for the last two or three years for every
person signing the loan.

□ Copies of at least one pay stub for each person signing the loan.

□ Account numbers of all your credit cards and the amounts for any outstanding balances.

□ Copies of two to four months of bank or credit union statements for both checking and savings
accounts.

□ Lender, loan number, and amount owed on other installment loans, such as student loans and
car loans.

□ Addresses where you’ve lived for the last five to seven years, with names of landlords if
appropriate.

□ Copies of brokerage account statements for two to four months, as well as a list of any other major assets of
value, such as a boat, RV, or stocks or bonds not held in a brokerage account.

□ Copies of your most recent 401(k) or other retirement account statement.

□ Documentation to verify additional income, such as child support or a pension.

□ Copies of personal tax forms for the last two to three years.

Common First Time Home Buyer Mistakes

1. They don’t ask enough questions of their lender and end up missing out on the best deal.
2. They don’t act quickly enough to make a decision and someone else buys the house.
3. They don’t find the right agent who’s willing to help them through the homebuying process.
4. They don’t do enough to make their offer look appealing to a seller.
5. They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.