Oct 25 2007
“Buy, Rent or lease option?” Part 2: Home Buying
This is something that was given to us by the OAPERI, located in Bend, Oregon. We have found it very informative, and so therefore are putting up the info here as part of a series (”Buy, Rent or lease option?”).
HOME BUYING
The true cost of home buying, is more than the down payment and mortgage. There’s also private mortgage insurance (if your down payment was less than 20% of the home price), homeowner’s insurance, property taxes, and maintenance. These costs can increase your monthly payment by 40%.
On the positive side, in buying the home in a conventional manner, each payment you make on your mortgage brings you one step closer to home ownership. As you pay on your mortgage, you increase the equity you have in your home (unless you have a negative amortized or interest only loan). This equity can be proven to be beneficial if you want to sell your home or use it to borrow money.
It’s a pretty well-known fact that mortgage interest payments and some property taxes are tax deductible. In 2008 the mortgage insurance payment is also deductible. For many, this is a very good reason for home buying. Not only are you investing your money in a valuable asset, you get a break from the federal government for doing so. When you buy real property, property maintenance is your responsibility.
You will either have to maintain the home yourself or pay someone to do it. In either case, it is an additional concern and cost that you must take into account. There’s also appreciation. That’s where you realize profit just by owning the property and allowing the economy to raise the value of the property. Sometimes this can be significant if you live in an area of rapid price upswing. If you own a property for ten years the value of that property will likely double.
More Woodhill Homes information on:
- Homes for sale in Central Oregon
- Bend, Oregon (homes, events, community)
- More info on Central Oregon (homes, events, community)
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