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Pros for buying a HOME?

Discussion in 'BBS Hangout' started by ToyCen428, Nov 23, 2009.

  1. ToyCen428

    ToyCen428 Member

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    I'm 25, married, with my first baby due in April. The government extended their homebuyer tax credit to middle of 2010. The original plan was, we wanted to wait 2 or 3 years to purchase a home. Thing is, the tax credit will take off $8k on a house. It'll also cover up to $7k in closing costs which will just about cover everything. I honestly don't think I could save even $8k in the next 3 years, much less $15k. I'm going to talk it over with a realtor soon so he can give me an estimate on my mortgage payments, but from what I'm hearing it'll be a little more then what I'm paying for now with my apartment.

    I want to look furthur into this, but my wife shuts down the idea, saying we can't afford it and also the fact that we recently extended our apartment lease until 02/2011. The houses I had in mind would most likely be the kind of place we'll end up getting... being that its in the county we want to be in (for the best schools) and its just outside of the city limits where all the house prices have been jacked up. (seriously, you find a house around here for $230k and its a complete dump. these houses I'm looking into are from $189k-$230k, brand new)

    SO this brings me back to my thread title, what are some PROS to buying a house? My sister told me she claims her mortgage INTERESTS on her taxes every year and gets back $4k ALONE for her house. If I add that in to my yearly finances of a new house vs my apartment and I'll be paying $200-$400 more a month for the house.

    Please help me list some good things I may not even be aware of on buying a home.

    No mentions of living on a UFO, spaceship, on the moon, and no more "thats no moon!" comments. Thanks.
     
  2. MadMax

    MadMax Member

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    I don't have any moon comments....

    but I'll leave you with this:

    1. 30 year mortgage

    2. Mayan calendar

    you do the math!!!!
     
  3. bobrek

    bobrek Politics belong in the D & D

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    Interest and property taxes are deductible. As an example, take your 2008 tax form, pretend you paid $7500 in interest and $1000 in property taxes and do the math.

    You are establishing equity in property. More than likely, you will buy something that will appreciate in value over the next few years.

    It's an asset.
     
  4. ToyCen428

    ToyCen428 Member

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    You remember me Madmax? I was the guy that helped you find a log for your fireplace about 5 or 6 years ago in Walgreens at Memorial/Dairy Ashford? lol
     
  5. updawg

    updawg Member

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    you have to fix whatever goes wrong with the house, no landlord. possibly higher utilities, maintenance, etc.

    don't just look at the mortgage payment, factor in insurance, taxes, hoa fees, etc. some realtors and mortgage brokers leave that part out to unsuspecting borrowers.

    if you can afford it do it, but don't get in over your head, especially with a kid coming. Do your research, don't get pressured just because of a great deal, tax credits, dream house or whatever.
     
  6. juicystream

    juicystream Member

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    Judging by your post, I'll say that you have no business buying a house.

    The tax credit is just $8,000, and you will only be able to use it as a down payment if it is an FHA loan with the HUD. There are tax advantages as well as investment advantages to owning.
     
  7. Lil Pun

    Lil Pun Member

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    Bought our first home earlier this year and I must admit I like it much better than renting. One of the best things is there are no rules to follow. You want pets, then get them. You want satellite service, get it. You want to paint or hang something up in a certain room, do it. As bobrek said, it's an asset as well and you get to write off stuff on your house. The $8000 credit is a nice bonus this time around and we should be getting ours this week or next.

    BTW, how do you deduct interest and taxes? Does the financial institution send you something through the mail indicating what you have paid that year?
     
  8. TeamUSA

    TeamUSA Member

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    wow. that's a lot better than Obama's tax shelter program. you only get to pay 2 years for your mortgage.
     
  9. Vinsanity

    Vinsanity Contributing Member

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    No way. If you can't save 8k in 3 years then it sounds like you are already stretched. Buying a house would only make you even more stretched. You have no business buying a house. It isn't 2005 anymore where people with no money could actually get a decent house. Times have changed, and on top of that we should have all learned from those mistakes. A house is a huge expense.

    If you can put down 20% and afford the monthly note on a 15 year mortgage, then you should buy the house. Anything less than that and you are stretching it.
     
  10. updawg

    updawg Member

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    whover does your escrow will send you something. the county will also, showing what was paid
     
  11. ima_drummer2k

    ima_drummer2k Member

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    post deleted.



    But seriously, don't buy a house just because of the tax credit. And your mortgage payment (including taxes, insurance and HOA fees) should be no more than 1/4 of your monthly take-home pay. And you really shouldn't buy a house until you can afford to put down 20% so as to avoid PMI.

    Remember that an apartment lease only has you locked in for a year. A home mortgage has you locked in for 30 years. Big difference.
     
  12. Vinsanity

    Vinsanity Contributing Member

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    Yes. They will send you a year end statement, but it won't take as much off your taxes as you are currently thinking. It will be a nice deduction, but nothing groundbreaking.
     
  13. YaosDirtyStache

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    Well it sure beats renting bc you have no equity if you rent.

    ALSO, if you really are the toyota center why do you need a house?
     
  14. ToyCen428

    ToyCen428 Member

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    My apartment rent isn't even as low as 1/4 of my takehome pay lol. Closer to 1/2.
     
  15. BigBenito

    BigBenito Member

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    Out of curiosity, how are you getting your credit this year? I was under the impression it was something filed with taxes.
     
  16. Supermac34

    Supermac34 President, Von Wafer Fan Club

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    Pros to purchasing a home (in no particular order):

    1. Interest and property tax deductions (remember, you get to itemize and give up the standard deduction, so this is only a pro if your itemized deductions are more than the standard deduction)
    2. Build equity over time (you never get rent money back, but you are investing in your home as you pay for it)
    3. Property may increase in value
    4. It's your house, so paint the bedroom purple if you want.


    Cons:

    1. Property taxes
    2. HOA fees
    3. Maintainence costs
     
  17. Vinsanity

    Vinsanity Contributing Member

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    You should rent a cheaper place then and when you have saved 20% AND paid off all other debt, including vehicles, then start thinking about buying a house.
     
  18. Vinsanity

    Vinsanity Contributing Member

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    Other Cons:
    1. All expenses, repairs, and upgrades come out of your pocket
    2. Homeowners insurance another yearly expense
    3. Possibility that the home could depreciate and you lose money
    4. Added worry/grief during hurricane season
    5. Freedom. You are stuck in this place and can't really move freely if you get a new job offer in another city or country
     
  19. MadMax

    MadMax Member

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    holy crap...i forgot that was you!!! yes, i do...you helped me find the chimney cleaning log there. very cool.
     
  20. juicystream

    juicystream Member

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    They will send you a 1098 for Mortgage interest. They may or may not show your real estate taxes on there, but they will be shown on the escrow portion of your statement assuming they are paid out of escrow. Then you deduct them on Schedule A. I don't have enough deductions to itemize, so I get nothing for my mortgage interest.
     

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