Buying a home in Rochester, NY

Do you really want to own your own home?

Have you considered what it is about owning your own home that you find appealing? The decision to buy a house is certainly not one to be made lightly because owning a home requires a significant investment in time, energy, and money. Therefore, the best way to start the home-buying process is by taking a realistic look at what you can expect from home ownership and what owning your own home implies. There are many good reasons for buying a house, provided you are ready for the increased responsibilities that come with home ownership.

Advantages of home ownership

Disadvantages of home ownership

Can you afford to buy a house?

If you’re convinced that you want to buy a house, you need to consider whether you can afford to buy one. You don’t want to find yourself living in a splendid house without a penny to spare for anything else. And you most certainly don’t want to overextend yourself to the point that you can’t keep up with your mortgage payments and risk losing the house. Continue our tour to look at your financial fitness for home ownership

Advantages of home ownership

Financial incentives
For many people, the motivation for home ownership is primarily financial. Owning your own home is a first-rate investment for a number of reasons.

Scheduled savings
When you buy a house, your monthly mortgage payments serve as a type of scheduled savings plan. Over time you gradually accumulate what lenders call “equity,” an ownership interest in the property that you can often borrow against or convert into cash by selling the house. In contrast, renters must continue paying rent to a landlord for as long as they rent, without the opportunity to build up equity.

Stable housing costs
Another advantage of home ownership is that while rents typically increase year after year, the principal and interest portions of “fixed-rate” mortgage payments remain unchanged throughout the entire repayment period, which is 30 years for a 30-year fixed-rate mortgage. In fact, because of the effect of inflation, this means that over the years you pay the same amount but with ever “cheaper” dollars. (However, with an adjustable-rate mortgage or ARM, the interest portion of the mortgage payments may increase if interest rates increase. See the “Alternative financing mortgages” section for further detail.)

Increased value
Houses typically increase in value, or “appreciate,” over time. In certain parts of the country, it is not unusual to find that a house that sold for $50,000 15 years ago is worth a higher amount today. This increased worth is as good as money in the bank to the homeowner.

Tax benefits
Homeowners also get significant tax breaks that are not available to renters. Most important, interest paid on a home mortgage is usually deductible. This alone can save you a substantial amount each year in federal income taxes.

Disadvantages of home ownership

Despite its many attractions, home ownership is not for everybody. For one thing, buying a home is a complex, time-consuming, and costly process that brings with it sometimes unwelcome responsibility.

High cost of home ownership
Buying a house can put considerable strain on a family’s finances. Usually, at least for the first several years, you can expect to pay more for housing as a home buyer than you did as a renter. Even if your mortgage payments are less than you paid previously in rent, you must also pay property taxes, homeowner’s insurance, utilities, and upkeep expenses.

Possibility of foreclosure
Foreclosure is the sale of a mortgaged property by the lender when the borrower defaults on the mortgage. A mortgage represents a large financial obligation extending over a long period of time. Financial institutions can and do foreclose when borrowers fail to keep up their payments. This can result not only in the loss of the house, but also the loss of the homeowner’s investment and good
credit rating.

Decreased mobility
Homeowners also have less mobility than renters. A home buyer cannot move after simply giving the required notice to the landlord. If you anticipate being transferred to a new job location within the next year or two, this might not be the ideal time to buy a house.

Repairs and maintenance
Many people shy away from buying a house because they don’t want the responsibility of maintaining a home (mowing the lawn, taking care of needed repairs, etc.). In fact, the promise of getting the advantages of home ownership without the accompanying repair and maintenance responsibilities is a major factor in the increased popularity of condominiums.