There comes a time in everyone’s life where they have to make the ultimate decision and decide whether to buy and own their own home or continue to rent. It’s a huge decision as both have notable benefits and disadvantages and it is not one to be taken lightly. So lets have a look at these advantages and disadvantages to see which option is really the best option for you.

Owning your own home is the traditional dream that practically everyone has, especially when it comes to starting a family. It gives you a feeling that you have accomplished one of your goals and that you are both financially and emotionally secure as well as giving you a great sense of community. But is it the right decision for you? Lets have a quick look at the advantages and disadvantages of buying and owning your own home.

Advantages:

• Set your own rules
• Sense of security
• A home is a great investment (long term, not for a quick turnaround, especially in todays market)
• Get various sort of tax rebates and deductions
• Repayment is usually the same or even lower than it would cost to rent – see example of my rent vs own comparison
• You build equiry over time
• Improve your credit score if you need a loan in the future

Disadvantages:

• You are liable for any accidents and injuries on your property
• You are liable for any damage to your neighbors house if stemmed from your property – for example a tree branch falling over the fence and damaging something in your neighbors yard.
• Responsible for any maintenance in, on, or around your home
• No longer can you just pack up your things and leave when you want. You’ll need to list and sell your home
• Large loan responsibility even if you are having financial hardship
• Required to have homeowners insurance to cover damages to the property
• Responsible for property taxes
• Requires an upfront down payment (VA and USDA are 100% financing products, if you qualify)

Renting is something most of us start out doing and many people are comfortable doing it all their lives. There are many advantages to renting a home but there are also a few disadvantages. Let’s have a look at them.

Advantages:

• You can up and leave as soon as your lease it up
• If you run into a financial hardship, you can move again
• Little or no responsibility for maintenance
• Sometimes utilities are included in the rent cost
• Sometimes you have free use of amenities such as laundry, pool, and other sorts of actualities

Disadvantages:

• Limited or no freedom to what you can do with the place (paint, design, build, etc)
• Rent MAY increase
• No tax deductions
• At risk of being evicted
• The house could be sold and you can be asked to leave
• Could have restrictions on certain things like noise and pets
• Could have restrictions on the number of members living in the house/apartment
• Rent is not going into a productive investment for you

As you can see clearly there are many advantages and disadvantages to owning your own home and renting. Some have advantages and disadvantages the other doesn’t have, but both can be a comfortable way to live. When it really comes down to it you have to choose the one that suits you’re financial, emotional and lifestyle needs at this time. You have to take your future into account as well, will you want to be tied down and take responsibility for a huge investment or will you prefer the freeness of being able to move whenever you please?  It can be quite a hard decision to make and it is one that needs a lot of time and thought before you proceed to take any further steps.

When you call me, I take the time to evaluate your current financial status and together we can compare the pros and cons to owning a home. In addition, I take the time to complete a Total Cost Analysis. Together, we will find the program that works best for you and your family.

My answer to the question is always – ABSOLUTELY! The buyer should always get an inspection done on a home before moving forward with the purchase. And no, the appraiser (even on FHA loans) does not inspect the home as in-depth as a Home Inspector.

Imagine moving into your home in the middle of winter, only to find out that the furnace doesn’t work. Replacing a 40 year old furnace is far more costly than hiring a home inspector. Buying a home is likely the largest investment you’ll ever make. The buyer needs to be assured they are investing in a quality home.

A Home Inspector will examine the following (and much more):

• Heating System
• Central Air Conditioning System
• Interior Plumbing
• Electrical System
• Roof and Attic
• Insulation
• Walls, Ceilings, and Floors
• Windows and Doors
• Foundation
• Basement (not very popular in Frisco Texas)
• Overall Structure of the Home

Back on March 11, 2011, the Federal Housing Finance Agency announced two exciting changes to the Texas Home Affordable Refinance Program (HARP). This program is for Texas borrowers who have demonstrated an acceptable payment history on their Texas mortgage, but due to a decline in Texas home prices or where mortgage insurance is not available, have been unable to refinance to obtain a lower payment or move to a more stable Texas mortgage product. Here is a quick re-cap of the changes:

The program has been extended by one year. Texas lenders can continue to originate HARP loans provided the note date is on or before June 30, 2012.

The program has been expanded, and more Texas loans will now qualify for the program. Previously to be eligible for a HARP loan, the existing Texas loan had to be purchased by Fannie Mae or Freddie Mac prior to March 1, 2009. This date range has now been expanded to include Texas loans purchased by the agencies prior to June 1, 2009.

This means that people who may not have been able to take advantage of a HARP Texas refinance in the past may now be able to do so.

USDA Rural Development and its loan program were designed to help improve the economy and quality of life throughout rural America. The program continues to remain a wonderful option for qualifying homebuyers, with zero down payment required.

But a change is coming!

Beginning October 1, 2011, for the first time in the history of USDA, the Single Housing Guaranteed Loan Program will have an annual fee. This fee will be calculated based on the guaranteed loan amount and based on the average annual scheduled unpaid principal balance for the life of the loan.

If you’re thinking of purchasing a home and you’re wondering if you may qualify for a USDA loan, give me a call right away. Home loan rates are still very attractive. Let’s see if this program is right for you…before the October 1 fee begins.