Owning A Home Has Benefits: San Mateo, CA

Opportunity is knocking for all of you considering homeownership for the first time.  We are seeing historically low interest rates, lower home prices in many areas around San Mateo and the first-time homebuyer tax credit – part of the American Recovery and Reinvestment Act of 2009 – brought first-timers to the market in droves this year.

In fact, these new first time buyers represented about half of all home sales logged during much of 2009’s first two quarters, according to the National Association of REALTORS^®, a significant increase from historic levels. Plus, the favorable conditions that prompted many of these buyers to finally do something are likely to continue into  2010.  Even the first-time homebuyer tax credit – set to expire Dec. 1 – may get a second wind as legislation is pending in both houses to extend it into next year.

Today’s opportunities aside, here are eight time-honored reasons why those of you still considering homeownership for the first time should make your move sooner than later.

1.  Pride of Ownership

Owning your own home adds to your own sense of self-esteem and personal pride. The satisfaction that comes from feeling connected to the land you occupy and the home in which you live is ages-old.  It really allows you to set down roots into a community.

2.  Security of Tenancy

With homeownership comes stability. When renting, you never know when you may have to move because of new ownership, rent increases or other changes. As a homeowner, you decide when and if you want to move or if you want to convert your home into a rental.

3.  Privacy

While there are usually some limits on the access landlords have to property, almost all landlords can access your property for necessary inspections and maintenance.  For many renters, this lack of privacy is a significant discomfort.  Homeowners on the other hand generally have much stronger property rights, and experience an increase in perceived and actual privacy.  No one has access to your home unless you have given them your key.

4.  Decorating

Homeowners are free to decorate, remodel and accessorize a home any way they want.  Not only do you have the right to make improvements, but the value of those improvements becomes yours as well.  Having your living space and exteriors just the way you want them can significantly increase your satisfaction with your living environment.  I must, though, provide a caveat here, as the exterior changes you may want only can occur if you do not live in a Planned Unit Development, PUD.  PUD’s have restrictions on exterior changes and sometimes on color of paint, type of windows, front door and the like so it’s important to know what kind of home you are buying and what is and is not acceptable.

5.  Financial Predictability

When you buy a home with a fixed-rate mortgage, you have more predictability over future housing costs. Because your interest rate never changes, the amount of your payment never changes. Financial planning and credit are more easily managed with a fixed-rate mortgage compared to renting.  And in California, your property tax bill can never rise more than 2% a year so you always have a good idea of what your taxes will be annually.

6.  Building Equity

When you own your own home, you pay rent to yourself instead of a landlord. Most homeowners pay for their purchase by obtaining a mortgage.  As you pay off that mortgage, your equity builds and you gain an increasingly larger share in a valuable asset.  Over time, that asset can work for you in many ways, such as a home equity line of credit.  And of course, a home is a wonderful asset to pass along in an estate.

7.  Investment Appreciation

There are certainly no guarantees of property value appreciation as we have all witnessed these past 2 years.  In the long-term, however, real estate valuations almost always increase.  This means that when you decide to sell your home, its value may be significantly higher than when you purchased it. The difference in value is called appreciation.  You can reinvest that appreciation in other real estate or you may wish to downsize and keep the value of that appreciation for retirement or other purposes.  Today we anticipate an average appreciation of about 3% per year, so if you do the math, you will see you benefit from a home to live in and then leverage into another home.

8.  The Tax Benefits

In the United States, the cost of home mortgage interest and property taxes are usually tax-deductible. Depending on your circumstances, thousands of dollars in taxes can be saved each year. These tax savings are not limited to federal taxes either.  California follows their tax system on the federal system and offers similar incentives to homeownership.  The interest you pay for your mortgage is huge in the few couple of years of the loan, which is deductible on your taxes.  Some additional benefits are designed specifically for first-time home buyers, too. Your tax advisor can give you additional information.

Why are you still on the fence waiting to buy?  We’re here to assist you with the process and to make it fun while selecting the perfect home for you and your family.  Don’t wait any longer.  Give us a call.