Do you know the answer to this? Have you thought about the responsibility that comes with homeownership? It is nothing like renting. You can’t just call the supe to come over and fix the clogged sink or make a call when your neighbors are too loud. It’s a really big deal this thing called homeownership.
In a recent survey, the main reason first time buyers bought was an affordable market. The two reasons that followed were the tax credit and the low interest rates. Now, today is the last day you can take advantage of the tax credit. As you have heard over and over, you need a signed and accepted purchase agreement by today AND must close on your new home by June 30th.
Honestly, how did you answer the question above “Why are You Buying a Home”? Was it because you could get an $8000 tax credit? As much as I hate to say this, if your answer to this was yes, you’re not alone. I have talked to so many people in the last 12 months that decided to buy because of the money the government was giving away. My advice to them — great incentive to get out and start looking, but only purchase if you’re ready AND completely understand what you’re getting into. I just tweeted that it’s better to have “lost” $8000 vs. $80,000 or more due to a bad judgment on buying a home just to get the credit.
Here’s the thing. Yes, the money will be gone and that’s a bummer. I can’t help you there. BUT, what I can do is offer up the other two reasons people bought this year — affordability and low rates. Seriously, this couldn’t be a better time to buy. As we discuss weekly on our radio show, MN Real Estate Show on KTLK 100.3, this market is going to be here a little while — at least another 2-3 years. Home prices are not going to rebound fast because we have more foreclosures to get through. With that said, homes under $250,000 are still being gobbled up fast if they’re decent homes. Regardless of that, you have the lowest prices to purchase at in record years.
And what about low rates? I don’t have a crystal ball — wait, I DO have a bouncy crystal ball, but it doesn’t help me predict the future. I wish it did and I wish I had that ability. What I do know is that there are PLENTY of first time buyer programs out there with down payment assistance and lower-than-market interest rates. I have access to them all, PLUS, we do a few other things that most lenders don’t. For instance, in one of my blogs I talk about the 203K loan with FHA. I noted in the paragraph above that homes are gobbled up if they’re decent. What about the less-than-perfect homes? As a first time buyer, it’s tough to afford a home and then on top of it have money to do work. This is your BEST opportunity to make the house “yours”.
These are all great reasons to buy a home. And there are more, such as no longer paying another person’s mortgage by renting. May as well put your money into something that will appreciate — though that will take a little time, it’s still a better investment. There is something to be said about having your own place. Downside is you will have more expenses, maintenance, including furnishing and decorating. These are all things to consider. But, it’s yours. Not someone elses. You can do whatever you want to the house. You don’t have to answer to anyone. It’s the pride of ownership and that alone is one of the best reasons to buy in my opinion!
Then there’s the “tax credit” you get. No, not speaking of the one that expires today. That would be silly. I am talking about the tax benefit of owning a home. Most of you probably don’t get to write off any expenses, like the donations you give of stuff or money. Wouldn’t it be nice to get a benefit from that? As a homeowner, each year you can itemize all of the interest you pay on the loan and all the property taxes you paid that year. Did you know, you can also itemize the state income tax that you pay? Nice benefit there. I don’t want to mislead you. Not everyone will get this tax benefit, or I should say, be able to utilize it. If the loan size is smaller, along with lower rates, you may not have enough itemized deductions to EXCEED the standard tax deduction listed on page 2 of the 1040′s. And that’s okay. Sometimes not paying a lot for a home loan is a really good thing! There’s more to this and I am happy to explain further your benefits based on your situation.
So, the question still stands — “Why are You Buying a Home?” I’ve given you plenty of reasons that still make sense even though the tax credit is expiring. My hope is you have other reasons for owning. But as I said earlier, it’s NOT something to enter into lightly. As a matter of fact, the best advice I can give you, short of coming to one of my seminars 
, is to go to a Homestretch Course. This will not only teach you most of what you need to know when buying, but also what it takes to maintain your home after it’s yours. Also, this will meet the pre-requisite to be eligible for most of the first time buyer programs. Look at that — kill 2 birds with one stone — learn about homeownership AND qualify for down payment assistance. And who doesn’t want interest-free money and lower rates? Sign me up 
A quick look at the rates today for the MN Housing programs sent us all into an uproar at the office. MN Housing is quoting 3.75%* for a government 30 year (yes, 30 years, not 15), fixed rate. This is for their MMP program which doesn’t require the 8-hour Homestretch class, offers no down payment assistance, but DOES offer a great rate. And when I say great rate, I mean “out-of-this-world-I-can’t-believe-it’s-not-an-adjustable-rate-Macaulay-Culkin-shocked-look” rate. This is off the charts. Who would have guessed we would not only see rates this low, BUT, see them on the special first time buyer programs? Certainly not me!!
