Posted by: Bill & Gayle McCord | March 22, 2010

Reasons to Buy Now

Financial (& Other) Reasons to Buy a Home Now

Getting those new house keys has a lot of advantages.


I imagine you were expecting a “when the economy improves” tacked on the end.  Crazy enough, we  actually mean now.  You might be surprised how many reasons there are to buy now.

You Increase Net Worth: Owning your own home (versus renting) really increases your net worth.  Not much affects your net worth more than home ownership.  Case in point: the Federal Reserve Board of Consumer Finance found that the average net worth of renters was just $4,000 compared to homeowners at $184,400.

You Get a A Big Tax Deduction: While it may not be exciting to write the check for your mortgage every month, the upside is that you get to deduct the amount of interest you pay on it.  In fact, a $150,000 home at a 5.50% interest rate can add up to approximately $8,000 in first year’s interest. This is a great saving.

You Enjoy Long-Term Appreciation: Over the last few years, home prices have corrected and become more affordable. While that’s good news for potential buyers, it has overshadowed the long-term appreciation of a home’s value. The reality is, despite market ups and downs between 1950 and 2002, US home prices appreciated at an annual growth rate of 4.8%. Even if you calculate a modest appreciation of 3%, a home purchased today for $150,000 will grow in value to $364,000 over 30 years.

You Can Take Advantage of the Economy: Let’s be honest- affordability is better than ever.  You can use this when you look for your new home by asking for price reductions, improvements, and closing costs.  You may not get it all, but the seller, possibly desperate to get a contract, is  likely to work with you.  (Plus, you know our philosophy- negotiation works for everyone!)
You can (and should) Take Advantage of the Tax Credit: Hard times call for desperate measures.  So, don’t forget that the government is offering a tax credit of up to $8,000 for first-time buyers through April 30, 2010. The tax credit has also been expanded so that qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years can receive a tax credit of up to $6,500.

25 OF THE MOST OVERLOOKED TAX DEDUCTIONS

Accounting fees for tax preparation services and IRS audits

Amortization of premium on taxable bonds

Appraisal fees for charitable donations or casualty losses

Appreciation on property donated to a charity

Cellular telephones

Cleaning and laundering services when traveling

Commissions and closing costs on sale of property

Contact lenses, eye glasses, and hearing devices

Depreciation of home computers

Federal estate tax on income with respect to a descendant

Fees for a safe-deposit box to hold investments (i.e. stock certificates)

Improvements to your home

Investment advisory fees

Lead paint removal

Legal fees incurred in connection with obtaining or collecting alimony

Margin account interest expense

Mortgage prepayment penalties and late fees

Points on a home mortgage and certain refinancing

Real estate taxes associated with the purchase or sale of property

50% of self-employment tax

Seller-paid points on the purchase of a home

State personal property taxes on cars and boats

Subscriptions to professional journals

Worthless stock or securities

Employee’s moving expenses

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