7 REASONS TOBUY A HOME

NOW!Wednesday, March 13

For years, thefederal government

has considered itimportant forAmericans to ownhouses. Home ownership helpsfamilies buildwealth, gives them asafe and stable placeto stay, and createscommunities ofstakeholders whopull together tomeet each other’sneeds.

Home ownership is soimportant, in fact, that the gov-ernment does somethingexceptional to encourage peo-ple to own a house.

It gives a big tax break.Generally, the interest some-

one pays on their home loan isdeducted on their federalincome tax filings. Dependingon a person’s income and howmuch they deduct, the savingscan be substantial. It’s anotherreason why owning a home isone of the greatest wealth-build-ing tools a person can have.

TAX DEDUCTIONSThe United States Tax Code

uses a lot of big words — it’s oneof the most complicated parts ofour legal system, after all — butthe logic behind the mortgageinterest deduction is simple: Ifyou’re working to pay off ahome, the government wants togive you a financial break.

For most people, interest paidon a home mortgage loan isdeducted from their income sothat they pay taxes as if theyearned less money. If someonemakes $50,000 per year, for

example, and pay $5,000 inmortgage interest, they wouldonly pay taxes on $45,000 ofincome.

That example may be overlysimplified, and you should con-sult a tax professional to seehow it would impact your spe-cific situation. But’s safe to saythe mortgage interest tax deduc-tion is used by millions ofAmericans to reduce theamount of money they pay tothe IRS. It’s a powerful incentiveto buy a home and one thatfirst-time homebuyers need toknow about.

TAX FACTS:• 42 million taxpayers in the

United States claimed a deductionfor real estate taxes last year,deducting a total of $172 billion.

• The average taxpayer claimingthe real estate tax deduction sub-tracted $4,090 from taxableincome.

• Therefore the average taxpay-er saved $1,020 in taxes as a resultof the real estate tax deduction..

• The total savings from the realestate tax deduction in the UnitedStates was $43 billion.

SOURCE: REALTOR.COM

REASON NO.

1 Slash your tax billBuyers canget big taxbreaks fromUncle Sam

REAL ESTATE

FIRST-TIMEHOMEBUYER

GLOSSARY

TIPS

BIWEEKLY MORTGAGE— A home loan that letsyou make payments everytwo weeks, which canhelp you pay off yourhome faster over time.

SURVEY — A map ordrawing that shows theexact legal dimensions of aproperty.

COLLATERAL —Property used to secure aloan. In the case of amortgage, the home itselfis the collateral.

FIND YOURSELFA GOOD AGENTA good real estate agentmakes a big difference withany home purchase, butespecially for a first-timehomebuyer.

Look for an agent who isnot only well qualified andknowledgeable about thearea you want to live in,but also one who is patientand takes the time to reallyget to know your needs.

After all, an important roleof an agent — especiallyfor inexperienced buyers —is that of a teacher.

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One advantage of purchasing a home is that the federal government allows most people to deduct the costof home loan financing from their income, which can result in a big tax break.

They’re justthree words,but they carry

a lot of swagger.“It’s my house.”

That simple phrase has cometo mean so much more asAmericans have adopted homeownership as a national dream.It’s what we strive for and howwe set our goals, giving us atremendous sense of accom-plishment when we’re handedthe keys to our very own home.

We know it’s not just a pieceof property. When someonebuys a home, it becomes their

own personal sanctuary, anoasis where they can let life’stroubles melt away. Any homecan feel good, but it’s a far bet-ter feeling when the homeactually belongs to you.

THE PRIDE SHOWSYou can tell when you’re

driving through a neighbor-hood with a lot of owner-occu-pied homes. They’re generallykept up better than neighbor-hoods with more rentalsbecause people take pride inthe property they own asopposed to property they’retemporarily leasing.

Homeowners do simplerepairs as they’re needed, not

letting unsightly problems golong without being fixed. Theykeep their property neat andclean because it belongs tothem and they have their ownpersonal money at stake. Theykeep their lawn and landscap-ing in good shape so theirhome will leave a positiveimpression.

That all helps a home’s value,but there’s also a deeper reasonfor it. It’s the intrinsic valuepeople find in owning theirown piece of America.

LIVING THE DREAMHome ownership is as much

about fulfilling dreams as it isabout having a comfortable

place to spend time.When someone buys a

home, they’re making realtheir hopes and aspirations.Whether someone wants tobuy a simple, humble homefor the first time, move into anicer neighborhood or live ina palatial castle, buying ahome represents a dream ful-filled.

That’s another reason buyinga home is so appealing. Fromfirst-time home buyers to peo-ple who want to simplyupgrade to the home they’vealways wanted, one thing willalways be the same: It’s adream come true.

And now is a great time to seeyour dreams become reality.

REASON NO.

2 Pride of ownership

Home feels better when it’s actually yoursCOLOURS PHOTOGRAPHY

REAL ESTATE

FIRST-TIMEHOMEBUYER

GLOSSARY

TIPS

PITI — Principal, interest,taxes and insurance. Thisrefers to the entire housepayment, which includesmore than just the loanpayment.

EARNEST MONEY — Adeposit made by the homebuyer to prove they haveserious interest in buyingthe home.

MAKE SOMECHECKLISTSBuying a home for the firsttime can be intimidating,but it’s much easier if youbreak it down into smallparts.

When shopping for ahome, make a list of allthe features you’re lookingfor. You can mark them offand keep track yourfavorite parts of all the different houses you see.

And after you make anoffer, work with youragent to make a checklistof all the steps you needto take before closing. Notonly will it help you stayorganized, but it alsomakes the whole processfeel more doable.

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No matter what your lifestyle orwhat you do for a living, your lifeultimately revolves around your

home. It’s the place you wake up in themorning and the place you go to bed atnight. It’s where you make memories,have fun with your hobbies, eat meals,relax with friends and can simply beyourself.

REASON NO.

3 Make it your ownOwning a home

gives you freedom

REAL ESTATE

FIRST-TIMEHOMEBUYER

GLOSSARY

TIPS

DISCOUNT POINTS —Essentially this is pre-paidinterest, allowing the borrower to obtain a lowerinterest rate by paying anup-front fee. Often shortened to “points.”

PMI — Private mortgageinsurance. It protectslenders if a borrowerdefaults on their loan.

APPRAISAL — Writtenproof of how much yourhome is worth. It’s generally based on whatsimilar homes are sellingfor in nearby areas.

TITLE — The legal document that shows whoowns a property.

PRE-QUALIFYFOR A LOANBefore you start shoppingfor houses, it’s a good ideato pre-qualify for a loan.

This will let you knowwhat price range youshould shop in, and it tellssellers that you’re seriousabout your offer. It canalso help speed up theprocess once you decideto buy a home.

That’s why it’s so importantto make your home a reflec-tion of yourself, both in func-tion and style. There are asmany homes as there are peo-ple, and finding the righthome — then customizing itto meet your own personalneeds — is one of the bestways to improve the way youlive.

FIND YOUR STYLEA home isn’t just a few walls

and a ceiling. It’s a uniquereflection of who you are as ahuman. It can vary from wildand ostentatious to humbleand cozy, and decorating yourhouse to fit your personality isa great way to let yourselfshine. It tells people who youare and how you like to live,from simple to extravagant.

When you own a home, youhave a lot more flexibility withhow it looks. You don’t have toask a landlord for permissionto change the wall color, forexample. You just pick up apaintbrush and paint yourdining room red. Or orange.

Or beige.Or, really, whatever the

heck you want. It’s yourhouse, and it can be designedto match who you are.

ON YOUR TERMSNot only does buying a

house give you more controlover the decorations andstyle, but it also lets you findthe perfect size, location andlayout to meet your lifestyle.

Have a big family? You canbuy a home with lots of bed-rooms and a big back yard.Love big-city living? You canfind a modern loft close tothe city center, near all theaction. Like quiet and soli-tude? You can find a countrycottage at the end of a gravelroad.

However you like to live,you can buy a house that fitsyour needs. And with morehouses on the market at bet-ter prices today, you can besure to find the place thatmakes spending time at homemore enjoyable than everbefore.COLOURS PHOTOGRAPHY

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That’s not a bad thing, butit does rely on renters tohelp pay for that profit. Thelandlord doesn’t just have tomake enough money tocover the property, repairs,and any loans to pay for it,but also make enough profitfrom collecting rent to makeit worth their trouble.

Still, renters don’t alwayshave to help their landlordget rich. When someonebuys their own house,they’re helping themselvesprofit instead of helping alandlord.

BUILD UP EQUITYEquity is the difference

between what you owe on aproperty and what it is actu-ally worth. Over time, ashomeowners make theirhouse payments and buildup equity, that can amountto a sizable pile of cash.They owe less and less on ahouse that is worth moreand more.

For some people, buildingequity in a house is animportant part of theirretirement plan. They maychoose to pay off the houseentirely, or they may sell itand use the proceeds to help

fund their golden years.In any case, financial

planners say buying a houseis a smart idea for peoplewho want to build wealthover the long run.

GET CASH OUTSometimes emergencies

arise that force people todip into their savings. Ifsomeone has built up equityin their house, that’s onemore place they can turn forthe money without raidingtheir retirement fund.

In most states, homeequity loans help peoplewho need to tap into thatmoney, so making extraprincipal payments on ahome can actually build afinancial safety net. It’s defi-nitely a savings incentive —it won’t be as easy to spendand waste as money sittingin a checking account — butit will be there if you everneed it down the road.

If you haven’t alreadystarted building equity byowning a home, now is thetime to begin. The earlieryou start, the more equityyou can build up over time.

As they say, time ismoney.

REASON NO.

4 Paying yourselfIt’s a big piggy bank

REAL ESTATE

FIRST-TIMEHOMEBUYER

GLOSSARY

TIPS

LOCK IN — An agree-ment for a lender to offeran interest rate for a cer-tain period of time. Buyerscan pay lenders a fee tolock in a rate that they seeas favorable.

CLEAR TITLE — A titlethat is free of legal questions or liens on the property.

CHECK YOURCREDIT SCOREYour credit score can makea big difference in whatkind of interest rate you’llpay on your home loan —or if you can qualify for aloan at all.

It’s important to knowyour credit score up front.Not only will it help youknow what to expectwhen shopping for amortgage, it can also alertyou to potential problems.

Credit reports aren’talways accurate, so gettinga copy of your report earlyin the buying process willgive you time to iron outany issues that you mightuncover along the way.

There are a lot of reasons someone might want to becomea landlord — they would rather

own real estate than stocks, or theyknow how to do handyman work —but at the top of the list is alwaysmaking a profit.

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Afraction of apercent maynot sound

like a lot, but whenyou’re financing ahome over 30 years— and sometimeslonger — thatchange in interestrates can have ahuge impact onhow much you payfor the home overtime.

That’s why today’s interestrates make buying a home soattractive.

Years ago, it wasn’t uncom-mon for people to pay double-digit interest on their homeloans, which pushed theirmonthly payments higher andmade it harder for many peo-ple to afford a home. Thosehigh rates also meant buyerswould pay a fortune in interestfees over the life of the loan.

GOVERNMENTPUSH

One reason today’s interestrates are so low is that UncleSam wants it that way. TheUnited States governmentbelieves keeping mortgagerates low will encourage morepeople to buy homes and helpdrive economic growth.

With that in mind, theFederal Reserve began pur-chasing U.S. treasuries to keep

mortgage rates at historic lows.It was an unusual step thatmay sound complicated, butthe end result is simple: It’scheaper for you to borrowmoney to buy a house today.

No one knows how long thegovernment will keep interven-ing to keep rates artificially low,though. That’s another reasonwhy now is the perfect time forpeople to buy a home.

LONG-TERM PERSPECTIVE

Interest rates constantly fluc-tuate, sometimes changing sev-eral times in just one day. Butwhen you look at it over thelong term, today’s interest ratesare near record-low levels thatsimply can’t be ignored. Buyerswho lock in mortgage rates attoday’s levels are getting a

major bargain compared to thehistorically high rates of thepast.

Interest can also make amajor difference in how muchyou’ll pay over the life of yourloan.

Think of it this way: If youborrow $200,000 on a 30-yearloan, you’ll pay nearly $150,000less in interest payments with a6-percent loan than with a 9-percent loan. That 3-percentdifference may not sound likemuch, but it sure changes howmuch you’ll pay to the bankover the whole 30 years.

If you want to see the differ-ence for yourself, search for“loan amortization calculator”on the Internet. You’ll find lotsof Web sites that can help youcrunch the numbers for yoursituation, and you’d be amazedwhat a difference that interestfigure can make.

REASON NO.

5 Low interest rates

U.S. keeping rates low to spur home buying

REAL ESTATE

FIRST-TIMEHOMEBUYER

GLOSSARY

TIPS

AMORTIZATIONSCHEDULE — A tablethat shows how your loanbalance changes over thelife of your mortgage. Ifyou want to know whatyou’ll owe on the homeafter 10 years of makingpayments, the amortizationschedule will show you.

ESCROW — An accountthat can be used to payproperty taxes and insur-ance premiums.

FIND A GREATINSPECTOREvery home someone purchases — even onethat’s brand new — oughtto be inspected by a qualified, experiencedhome inspector.

The best inspectors areextremely thorough. They’llfind every little problemwith the home, which isvital to know up front.Buyers need to be aware ofthese things before makingtheir final decision.

A good inspection will letyou know exactly what toexpect down the road. It’smoney well spent.

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Renting canwork for somepeople, like

those who movearound frequentlyfrom place to place.

But when you’re ready tosettle down, whether to raisea family or just have a niceplace you can call home,nothing beats owning ahouse.

There’s a sense of perma-nence you get when you owna home, one you just can’tfind in an apartment orduplex, where moving trucksmark the coming and going ofneighbors on a regular basis.

RAISING A FAMILYIt’s important for children

to have a place of their own —complete with room toexplore as they learn andgrow — and the best way toprovide that kind of long-term stability is to purchase ahome that meets your family’swants and needs.

A home isn’t just a place tokeep you warm and dry. It’sthe place your children willmake most of their memoriesas they grow up, enjoying theholidays and spending timetogether as a family. It’s aplace they’ll always remem-ber.

And because today’s realestate market offers morehomes at lower prices, now isthe perfect time for youngfamilies to buy their piece ofthe American dream.

KNOWING YOURNEIGHBORS

Hosting a neighborhood bar-becue is a right of passage formany American families. Thesound of laughter, the smokysmell of meat on the grill, andthe warm smile of a longtimefriend can make your backyardfeel like heaven.

But how can you develop

those neighborhood bondswhen your neighbors arealways moving?

If you own a house in a safe,stable neighborhood, youdevelop close bonds with thepeople who live around you,the folks who share your inter-ests and are always happy tohelp you out when needed.

Putting down roots is a greatway to forge friendships that

last a lifetime. It would beheartbreaking to lose thoseclose connections if you’reforced to move at the whim ofa landlord, or your rent israised so much that your homeis no longer affordable over thelong term.

It’s another reason that find-ing the right house in the per-fect neighborhood is a smartidea right now.

REASON NO.

6 Putting down rootsOwning a home provides a sense of stability

REAL ESTATE

FIRST-TIMEHOMEBUYER

GLOSSARY

TIPS

REALTOR — A memberof the National Associationof REALTORS. Not all realestate agents are REAL-TORS.

PROMISSORY NOTE —A written promise to repaya loan over a certain period of time. Oftenshortened to “note.”

JUMBO LOAN — Anyloan over $227,150, whichis the top limit for FannieMae and Freddie Macloans. Sometimes called anonconforming loan.

WHAT YOUCAN AFFORD?This is a decision thatneeds to be made upfront, and there’s no easyanswer.

Mortgage companies cantell you what kind of loanyou qualify for, but that’sonly part of the decision.

You also need to look atyour personal budget andwhat kind of lifestyle youwant to live. Be sure youinclude expenses likehomeowner’s insuranceand property taxes in theplanning process.

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It’s no secret thatthe real estatemarket has

slowed down inrecent years.Houses aren’tselling as quicklyas they did in thewhite-hot marketseveral years ago,which means people who areselling their housestoday have to workharder than ever tomake a deal.

And that’s a great thing forbuyers.

Overheated real estate mar-kets, like we saw a few yearsago, result in too many peo-ple shopping for too fewhouses. That drives up pricesas multiple buyers make bidson homes and sellers holdout for the very top dollar.

In today’s market, though,there are a lot more bargainsto be found. Sellers have toprice their homes moreaggressively, making now theperfect time for smart buyersto get a great deal.

BUY LOW,SELL HIGH

When someone invests inthe stock market, they’readvised to “buy low and sellhigh.” This means to buy

stocks when their prices aredepressed and sell whentheir prices have risen, andthe same advice could applyto purchasing a house.

To be clear, housing hasn’tbeen as historically risky asthe stock market over thelong run, and there are a lotof reasons to buy a houseother than to make moneywhen you sell. A home istruly a home, not just a lineon your investment sheet.

But if you want to makemoney on your home overtime, it makes sense to buy ata time when the prices havedecreased rather than whenthey’re at their peak.

MORE CHOICESTO PICK FROM

If you tried to buy a home

several years ago but struggledto find the perfect place — orcouldn’t afford what you reallywanted — you might be pleas-antly surprised by today’s mar-ket.

There are more homes forsale at better prices today,making it the perfect time forpicky buyers. If your dreamhome was just out of your pricerange a few years ago, forexample, you might find it’sbecome affordable for youtoday. Neighborhoods thatwere out of reach could actual-ly be attainable now.

That’s the great thing aboutshopping in a buyer’s market.Sellers are more willing tonegotiate, and buyers havemore options to pick from.

And in real estate, like somany other things in life, tim-ing is everything.

REASON NO.

7 It’s a buyer’s market

More choices, better deals to be found

REAL ESTATE

FIRST-TIMEHOMEBUYER

GLOSSARY

TIPS

HUD-1 STATEMENT —A document that providesan itemized list of all thefunds that are paid at closing. It’s a standardform that spells out exactlywhat you’re paying for atthe closing table.

PREPAYMENT — Moneypaid to reduce the balanceon a loan before it’s due.This can save you a lot ofmoney over the long haul,but you need to knowwhether your loan has a“prepayment penalty.”

EDUCATEYOURSELFBefore you start thehome-buying process —and as you’re goingthough it — it’s importantto do your homework.

You need to know a lot ofdifferent things, like whattypes of loans are available,what to look for in potential neighborhoods,and the definition of lots ofreal estate terms.

The Internet has both solidinformation and some misleading Web sites, but agood agent can help youshorten the learning curve.

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