If you plan to stay in one area for several years there are a lot of good reasons to purchase a home instead of rent.
Prices go up
It costs you more each year to rent than it did the year before. If you are paying $1000 a month today and see a 3.5% increase, over the next 10 years you will have paid $140,000 (yes – One Hundred and Forty THOUSAND dollars).
Real estate taxes are deductible on your Federal income tax. Also, if you took out a loan then the interest you pay on your loan is deductible. Talk to your accountant to find out exactly how you would be affected.
Do the Math
Here is a brochure that does the math for you on a few of the issues.
$8,000 Tax Credit
Don’t forget about the $8,000 tax credit! If you add that in to that NAR brochure it makes a big difference, doesn’t it?
You can apply the tax credit to your 2008 or 2009 taxes. That means if you buy a house now you could file an amended 2008 tax return – the IRS could send you an $8,000 check after your purchase is finalized!
Want to know more about the tax credit for first time home buyers?
Read this post – details of who qualifies and what it means to you
Link to the IRS tax credit application form