Trying to decide if it's the right time to buy a home? Most first-time homebuyers listen to advice from many different sources - friends, family and coworkers - many of whom are encouraging you to buy a home. But you may still be wondering if buying a home is the right thing for you. Relax. Buying your first home is most likely the largest investment you will have ever made, so having reservations is normal. The more you know about buying a home, the less scary the process will be. By doing your homework ahead of time you will certainly help with your decision. Let's get started!

Here are some great reasons to buy a home.

Help from the Government

It's no secret that the current real estate market is a difficult one, mainly for sellers. But for those who are looking to buy a home, it probably doesn't get better than this. The U.S. Government is working to make it even easier with the 2008 Recovery Act that was passed last year. Under this Act, first-time homebuyers (anyone who hasn't had ownership in a primary residence in the past 3 years) may qualify for up to a $8,000 Tax Credit on their tax return. To learn more about the tax credit, visit our Federal Tax Credit section, which highlights the details of the program.

Pride of Ownership

This is the number one reason why people yearn to own their own home. It means you can paint the walls any color you desire, turn up the volume on your surround sound, attach permanent fixtures to the walls and decorate in your style. Home ownership gives you and your family a sense of stability and security. It's making an investment in your future.

Appreciation

Like most things in life, real estate always moves in cycles: sometimes up, sometimes down. But over the years, real estate consistently appreciates. With a fixed interest rate mortgage, many view their home as a hedge against inflation. The real estate market, with its high inventory of homes and at or close to rock bottom prices, makes this a "buyers" market, providing great opportunities for future home appreciation.

Mortgage Interest Deductions

Home ownership is a superb tax shelter and our tax rates favor home ownership. In most cases, the interest you pay on your mortgage (the largest part of your monthly payment) is fully deductible on your Federal tax return.

Property Tax Deductions

When you are renting a home, your monthly rent payment is used to pay the property taxes, but you don't receive the benefit of a tax deduction. Real estate taxes paid for a first home and a vacation home are fully deductible for income tax purposes.

Capital Gain Exclusion

As long as you have lived in your home for two of the past five years, you can exclude up to $250,000 (Individual) or $500,000 (Married) of profit from capital gains. You do not need to buy a replacement home or move up. You can exclude paying taxes on your capital gains (up to these amounts) every 24 months, which means you could sell every two years and pocket your profits tax free.

Preferential Tax Treatment

If you happen to profit more than the allowable exclusions mentioned above, the additional profit will be considered a capital asset as long as you owned your home for more than one year. Capital assets receive preferential tax treatment.

Mortgage Reduction Builds Equity

Each month, part of your monthly payment is applied to the principal balance of your loan, which reduces your obligation. The way amortization works, the principal portion of your mortgage payment increases slightly each month, the lowest portion in your first payment and the highest in your last payment.

Equity Loans

Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18%, 22% or more. Equity loan interest is often much less and the interest is usually deductible. For many homeowners with large equity in their home, it makes financial sense to pay off high interest loans with a home equity loan. Consumers can borrow against a home's equity for a variety of reasons such as home improvements, college, medical expenses or starting a business. As a first-time homebuyer, it may be several years before you have enough equity in your home to qualify for a home equity loan, but as the years pass, and your home appreciates, this is definitely one of the many benefits of home ownership.

The Process

The first step in buying your first home is meeting with a mortgage lender. At CENTURY 21 Almar & Associates we have an on-site CENTURY 21 Mortgage Advisor. Your CENTURY 21 Almar & Associates real estate professional can arrange for you to meet with our Mortgage Advisor to check your credit history and see how much home you can afford. This will give you parameters of which to begin your home search. Try to meet with a Mortgage Advisor months before you actually plan to purchase your home to allow time to correct any errors on your credit reports or to raise your credit limit, if that is an issue. Your Mortgage Advisor can also tell you about any special financing programs available to first-time home buyers that you might not be aware of. To get started, contact CENTURY 21 Almar & Associates today.