Introduction: • Background • Throughout the United States for generations it was typical for a couple to marry and then plan the purchase of their house. Today the face of the buyer has changed with many single people as well as families purchasing homes. • Problem • Deciding when it is the best time - to buy a home, financially is crucial. • Purpose • Explore the benefits of buying a home rather than renting. • Scope • Examine the advantages and disadvantages of renting and buying a home while considering an individual’s life style, goals and financial means.
Advantages to renting • Level of freedom - a lease expires usually after one year and the renter is free to move on to another location with no penalty or loss • Very little maintenance - more free time is available to pursue other interests • Up-front cash - dramatically less than is necessary in the purchase of a home
Disadvantages to renting • Throwing money away - which you will never see any kind of return. You are not investing it in a home’s value • Ability to decorate and personalize your living space is limited to minimum • No tax advantage that the renter can enjoy. Your landlord will benefit from any kind of tax break • Rent increase - yearly
Advantages to owning a home • You are making an investment - if you do your choosing carefully, this investment will grow • Tax benefits - you can deduct your mortgage interest and property taxes • You can customize your dwelling in any way you wish • Psychological benefits - a place to truly call home • Owning your own home has been described as part of the American dream for generations
Disadvantages to owning a home • Your home is an investment and it’s value or equity may go up or stay the same but it may also decline. It is somewhat risky • If you decide to move, your home must be sold and this is a big undertaking • Maintenance - that is an ongoing process.Either you pay for the maintenance or you do it yourself sacrificing much of your free time. • A sizeable down payment - is usually required when buying home
Determining the Best Time to Buy • Did you save enough money for a down payment? • Is your job likely to transfer you to a new location in the next few years? • Are you ready to assume the financial responsibilities associated with property and home ownership? • Will the maintenance be too much of a burden to you? • Have you found an area in which you are comfortable?
Conclusions • We can conclude that the majority of people would benefit more from purchasing a home • No matter what your status, single, married, divorced or just starting out in the workforce, it is usually a better option financially, with a few exceptions, to buy.
Keep track of your credit report Spend some time at the home buyer's prep. school Develop a budget Get your financial picture in focus Find ways to save money on your purchases Familiarize yourself with the various terms you will hear relating to buying a house Investigate mortgage pre-qualification and approval Get mortgage offer comparisons Get a full understating of how agency works when working with an Agent Find and choose an Agent Compare housing types to choose the best for you: Single family, townhouse or condominium Check home listings and prices online Determine the value of a home Compare homeowner’s insurance Recommendations
Works Cited Bluejay, Michael. How to Buy a House: Consider the Financial Impact of Buying a House. February 2004. 17 February 2004 <http://michaelbluejay.com/>. Dannan, Nancy. House & Home: Homeownership for Singles. 18 February 2004 <http://houseandhome.msn.com/>. Garton-Good, Julie. The Frugal Homeowner’s Guide: To Buying, Selling, & Improving Your Home. Chicago: Real Estate Education Company, 1999. Glink, R. Ilyce. 100 Questions Every First-Time Home Buyer Should Ask. 2nd ed. New York: Three Rivers Press, 2000. Lank, Edith. Home Buyer’s Kit. 4th ed. Chicago: Dearborn Financial Publishing, Inc., 1997. Mac, Freddie. New Buyer: Rent or Buy? 2004. 18 February 2004 <http://www.newbuyer.com/>. Murphy, Kate, and William Glasgall. “The House of Your Dreams-Pixel by Pixel.” Business Week (3594) 7 September 1998: Personal Business Russell, Judi. “A New Home Is Well Within the Reach of Many Buyers.” New Orleans CityBusiness 17(22) 12 February 1997: Focus Real Estate.