May 2013

First Time Home Buyers – A Final Step in Understanding the Benefits of Owning a Home

Welcome back first time home buyers.  This is the last of a three-part series outlining the main financial benefits to home-ownership:  Principle Reduction, Appreciation, and Tax Advantages.  From a real estate perspective, there are strong tax advantages to home-ownership. Tax Benefits: The third key financial benefit to home ownership is the tax benefit it provides. When people own their own homes, they have a stronger tie to their community and to the nation. One of the strengths of the United States is that it is a nation of homeowners. The US Government understands this and encourages people to own their own homes. They do this in several ways, but the most important way is through deductible interest. Real estate is treated differently than nearly every other purchase in this regard. If you were to get an auto loan to buy a new car, the interest would be treated strictly as…

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First Time Home Buyers – Continuing to Understand the Benefits of Owning a Home

Welcome back first time home buyers.  This is the second of a three-part series outlining the main financial benefits to home ownership:  Principle Reduction, Appreciation, and Tax Advantages.  From a real estate investment perspective, appreciation is an important benefit to home ownership. Property appreciation is one of the great things about owning real estate. Up until the last few years, it was considered a given that home prices would always rise. Home prices have risen steadily over the years, but since the real estate bubble popped in 2008, home prices have fallen – sharply in some areas. If you bought a home in 2005 or 2006, chances are your home value dropped to a lot less than what you paid for it.  But prices are determined by supply and demand. With the crash in prices, home builders mostly stopped building new homes.  As the economy improves, the extra supply on…

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When you’re a first time home buyer, there are so many reasons for owning a home:  the pride of having a place of your own, the need to establish roots, the joy of being able to have a place where you can express your own personality and style.  Buying a home lets you take control of your own home, a control you don’t have when you rent.  With mortgage rates at their lowest point so far this year, it’s a great time to review the financial benefits of owning a home.  Welcome to the first of a three-part series that covers the three main financial benefits to homeownership:  Principle Reduction, Appreciation, and Tax Advantages. Principle Reduction:  First of all, a quick explanation. With most mortgages, each payment is divided into two portions—principle and interest.  Interest is the amount the lender charges for the use of their money over the time…

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Economic Trends – Chicago Illinois Mortgage Rates Week in Review for the Week Ending 05/03/2013

While we have seen rate increases in the early part of 2013, the end of April showed record lows for the year so far. Finance reporters and rate strategists watch the economic trends, they are discussing a casino-like scenario where buyers are gambling to hold out for a better rate or lock in the current ones. To further assist the market, new mortgage delinquencies are at 6 year lows which should help to gently apply the brakes to the foreclosure situation that has kept home values at bay; although the effects will take a while to ripple through the system. There is still a major foreclosure buying opportunity in the marketplace. Estimates still have foreclosures representing over 40% of home sales here in the Chicagoland area, but the number is heading downward. Factors that cause light volatility in mortgage interest rates will continue for the near future. The jobless numbers…

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