First Time Home Buyers?

How can I make myself look at this as an investment and not a burden? We have enough money to buy a home but I just started a new job and have student loans to pay, I feel like I'll never get ahead!

Thinking about the fact that 'this is YOUR home' makes it worth it. You will not be paying someone else money to rent a home. With renting, you're really just throwing your money out the window. A house is an investment. Typically you can sell one for more then you paid for it. It really is worth it. I did it with debt, and now all my debt is paid off but for the mortgage. You will get ahead, it just takes time, and persistence.

Make sure you have an emergency fund of 3-6 months of expenses before you buy a house. And try to put 20% down.

well you know a house is an investment. BUT it can be a burden at times because of costs, downpayments, paperwork, fees etc. but that goes away. if you have the time to look at homes and have extra money to pay off loans and money to put down on a house...then go for it.

Rent vs. Own - Comparing the financial difference between renting vs. buying is not easy. I've looked at various 鈥渃omparison calculators鈥?and the one that I feel is the most impartial is one provided by Ginnie Mae, a government organization.

The calculator on their website requires minimal information but it provides a realistic estimate of the difference between renting and owning of a multi-year period. The information the calculator requires, other than price) is listed below along with recommendations if you don鈥檛 know the answer to some of the questions. Please note that this calculator does NOT take into account the single biggest advantage of home ownership after home appreciation: tax savings. You can generally deduct all taxes and interest paid on a home mortgage from your taxable income thus reducing your taxable income. This is a huge advantage of home ownership and is alone usually sufficient to justify purchasing a home as opposed to renting.

Gennie Mae calculator questions and possible answers:

Percentage of Down Payment: Enter 0 (0%). Few first time buyers have cash to put down and if you have a reasonable FICO score you get 100% financing.

Length of Loan Term (years): Enter 30. Most mortgages are for 30 years.

Interest Rate: Enter 6.5 (6.5%). This is a reasonable number.

Years You Plan to Stay in This Home: Enter a number between 5 and 7. This reflects the national average of the number of years people typically stay in their home.

Yearly Property Tax Rate: This is difficult since it varies by state and maybe even city. I think a reasonable number to use would be 1%. Depending on the state this could be very off. In Las Vegas (where I live), a reasonable rate would be about .8%.

Yearly Home Value Increase Rate: This is the great unknown. Today we are in a slump but I do not believe it will remain so. I would try rates ranging from 5% to 7%. These are reasonable if you are looking at appreciation over 5 to 7 years.

Here is the link to the Ginnie Mae Rent vs. Buy Calculator: http://www.ginniemae.gov/rent_vs_buy/ren...

Eric Fernwood
Eric@ISellLVHomes.com
www.ISellLVHomes.com