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Buy Versus Rent - Renters Enjoy Much To Gain By Pursuing Home Ownership

It is a big judgment to buy vs rent in Colorado, and it needs thoughtful consideration, as most mortgage lenders will agree. But the advantages of home ownership are striking. For several years, buying real estate has been regarded as a highly profitable investment. It is an attainment that offers a sense of pride, economical stability and potential tax benefits.

There are certain responsibilities associated with owning a home. Landlords will frequently argue the benefits of renting, and for apparent reason. If you are renting, you're serving them make their mortgage payment.

The numbers are amazing if you look at it this way. If you are paying $1,000 a month for an apartment, and you know your rent will go up 5% every year, then over the next five years you would pay your landlord $66,309. If you are presently renting an apartment, you may be paying much more than that each month. Either way, you get no equity by paying this monthly housing expense and you surely won't benefit when the property price goes up!

However, if you were to buy your own home or apartment, you would be well on your target toward building equity within that equal five-year period. By choosing a fixed-rate loan plan, you can have the comfort of knowing that your monthly mortgage payment will never get higher. In fact, you would have the choice of refinancing to a lower interest rate at some point in the future should interest rates fall, and this would cause your monthly mortgage commitment to decline.

In addition to building equity, there are tax benefits that come into play with home ownership. Based on your tax bracket, owning a home is typically less expensive than renting after taxes. Interest costs on a mortgage below $1 million are tax-deductible, and your mortgage consultant should help you check the tax advantages of various loan scenarios, and share this details with your tax consultant to glean feedback on your behalf.

There are also several first time home buyer programs in Colorado. To identify the loan program that is suitable for you, your mortgage broker will need to review your monthly household income, current property and savings, as well as any monthly commitments you may have for credit card payments, car payments, child support, etc. These prequalification factors, along with the details of your credit score, will decide how much house you can afford and what interest rate you will pay for funding. It is also essential to let your mortgage consultant learn what your future goals are, since this will help narrow down which loan program is the best match for your long-term needs.

There are various types of loan plans available, including "low" and "no" down payment mortgage programs. These forms of programs demand the first time home buyer in Colorado to give less than 3 percent of the loan amount as a down payment. FHA lenders rule that the mortgage payment, combining principal, interest, taxes and insurance (PITI) should not surpass 31% of your gross income, and the PITI plus other long-term debt (car payments, etc.) must not exceed 43% of your gross earnings.

Housing is an expense that takes a big bite out of the monthly expense. If you are a renter and believe that "home" is more than just someplace to hang your hat, consider the advantages of buying real estate. It may be time to take the measure into building your personal net worth as a landlord.

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