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Still Writing Rent Checks?

With home prices and mortgage rates low but on the move, the time is now for renters to consider purchasing a home.

December 4, 2014 - There certainly are financial benefits to homeownership, but it also can be hard to put a price on the pride and security one can feel from owning a home. This winter is a prime time to purchase a home because mortgage rates and home prices are still low, but they are trending upward. The longer you wait, the higher the chance you will pay more for your home and loan.

There are many factors to consider when deciding whether to purchase your first home. Below we explore some of the advantages of homeownership to help guide you in your decision.

Financial Advantages of Homeownership

  • Lower monthly payment. Yes, your monthly mortgage payment could actually be lower than your rent payment. This is especially true right now because mortgage rates and home prices are low, while rent is increasing in many areas. There are rent vs. buy calculators online to give you an idea of how much home you can get for the amount of your rent payment, but because Bremer Bank has special financing programs – including ones with with downpayment assistance - and local decision-making, we recommend talking to one of our mortgage loan officers for an accurate comparison.
    Note: You will need to take into consideration items you will have to pay for with a home that you may not with your apartment or condo, such as insurance, utilities, yard equipment, maintenance, appliances and property taxes.
  • Build equity and credit. As you make mortgage payments, you are building equity (or savings) in your home. If the value of your home increases, so will your equity, and this can increase your wealth over time – called return on investment. When you rent, there is no return on investment with your monthly payments. In addition, when you make your mortgage payments on time every month, you are improving your credit score.
  • Tax benefits. Homeowners can deduct some or all of the mortgage interest and property taxes every year on their federal tax forms. There may even be some state tax deductions, too. In the early years of homeownership when your monthly payments are mostly interest, this can be a huge benefit. Consult a tax advisor for your individual situation.

Other Advantages of Homeownership

  • Feeling of stability. Having a home to call your own can bring a feeling of stability – a permanent place to live and grow – which is especially desirable when starting or raising a family.
    Note: Stability in your job and life is also important when considering homeownership. Once you're in a home, you will have less flexibility to move to another town or state for a job. If you have school-age children, it can be difficult for them to change schools.
  • Advertise your sense of style (or lack thereof).When you own a home, you can make changes and renovations to walls, floors, appliances, the yard.....whatever you like to make it home sweet home. Yes, that includes turning the basement into a man cave. Sorry, ladies…
  • Becoming part of a community. Homeowners typically have more opportunities to get to know their neighbors, and feel a sense of belonging and desire to become more involved in the community to help ensure its well-being.

Want to Learn More? Stop by your local Bremer Bank to speak with a loan officer about your mortgage financing options and get a free loan prequalification so you know how much home you can afford.

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