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Anyone in Columbus who pays a large rent check to a landlord every month should review whether or not their money would be better spent as a mortgage payment. With record low interest rates and a large selection of homes for sale, the possibility for home ownership in Columbus has never been better.

Consider the follow points before making a call to engage the services of a Columbus real estate agent.

Taxes: When you buy real estate in Columbus, your investment provides tax advantages. Your monthly mortgage payment is typically made up of four elements: principle, interest, property taxes and insurance. As a home owner, you can deduct all your interest and property tax payments from your federal income tax return.

Most people simply take the standard deduction on their income tax return since it’s quicker to file that way. Taking advantage of the tax breaks that come with owning a home requires you to itemize your deductions instead. Ironically, itemizing your deductions usually saves you money, because you can also deduct many other expenses like donations, or medical and dental costs over 7.5% of your income.

Home ownership sometimes requires upfront costs, like a down payment, earnest money and closing costs. It also requires you to budget money for regular maintenance of the property, as well as the payment of property taxes and homeowner’s insurance. Still, your total monthly cost may be similar to what you’re already paying for rent.

If you are planning to stay in one place for at least five years, then home ownership is often a better choice. Studies by the Government National Mortgage Association (GNMA, also known as Ginnie Mae) show that, because of tax advantages and inflation, home ownership usually becomes less expensive than renting starting in year three.

With home ownership, you steadily build equity in your property. This equity is an asset that can provide you later with financial security as well as the ability to borrow against it for things like home improvements, college tuition payments for your kids, or even for the down payment for your next home. Over time, as the interest portion of your loan payments decrease, the principal portion increases. Since the principal becomes your equity, this means that your asset grows more quickly over time.

Lifestyle: There are some non-financial factors to consider, too. What is your lifestyle like? Home ownership requires some stability. If your job requires you to move fairly frequently, renting may be a better option for you. On the other hand, home ownership provides some freedoms that renting can’t: you can do as you wish with your property. You can change the decor and landscaping whenever you like. You are not dependent upon the landlord’s permission to improve the property. And you don’t have to wait for the landlord to get around to repairing any problems.

Home ownership taps into the great American Dream of owning a piece of property to freely grow and develop. Because you are tangibly investing in a community, ownership makes you a member of that community in a very special way. And it provides a sense of belonging to a neighborhood. It’s just not the same if you rent.

Author Susanne Novak is a long-time realtor who helps home owners buy properties at discounted prices. Read her blog to find the best Columbus houses and successfully purchase Columbus OH Homes for Sale.

Comments (0) Jan 30 2010

Being prepared is perhaps the most important step in home ownership. There are few if any purchases you’ll make in life that are as expensive or important as a home, so it’s worth your while to do it carefully. Here’s what you need to consider.

Everyone has a reason for wanting to buy a home. After all, home ownership is part of the American Dream. You may need more space or have received an inheritance you want to invest. Or perhaps you’ve crunched the numbers and found that home ownership, with its many tax advantages, is less expensive than renting. There may be several reasons why you are considering buying a home. What’s your reason?

What’s your timeframe? It could be that you’re moving to a new location next month for work, and the need is pressing. It could also be, though, that you’re in no rush whatsoever, so you can take your time finding the perfect home.

What type of home do you want to live in? Urban or Rural? New construction or older home? Large or small? There are many different types of homes available for every taste imaginable.

Speak with your realtor, accountant or banker about how to finance purchasing a home. They will also help you determine the price range of home you can comfortably afford to buy. These advisors keep up-to-date about finance programs, and can advise you where to go to get the best mortgage deal. It might even be possible to fold all your closing costs into the arrangement.

The general rule of thumb is that all of your debt payments combined (house payment, school loans, car payment, credit cards, etc.) should not come to more than 30% of your gross monthly income. There is some leeway within this guideline. If the home you want to buy needs a major improvement (e.g., central air conditioning), it’s also possible to get a mortgage that will include funds for the upgrade.

Homes need regular maintenance and upkeep. Even new homes have problems occasionally with plumbing, windows, furnaces and light switches. You can do the repair work yourself in many cases, but there will be times when you’ll have to call in a professional repair person. One of the joys of home ownership is doing regular tasks like mowing your lawn; it makes sitting on your patio afterwards that much more fulfilling!

For most people, home ownership is incredibly fulfilling and emotionally rewarding. It’s a labor of love that gives back to us ten-fold over the years. So be prepared.

About the author: Susanne Novak is a long-time property investor who helps home owners buy properties at discounted prices. Read her blog to find the best Columbus houses and how to buy Columbus OH Homes for Sale.

Comments (0) Oct 31 2009