First time homeowners: you have some benefits coming your way!
So you’ve made the leap from renting to buying, and have just closed on your first home. Congratulations! Let me tell you some of the things you can look forward to now that you’re a proud homeowner.
Your credit score will go up
Your credit may have taken a small hit when you begin shopping for a mortgage, when you have inquiries made into your credit. But after adding an installment loan and establishing a history of on-time payments, your credit score can really get a bump. Begin to look for an improved credit score a few months after closing.
You’re building equity for the future
As you repay your home loan and increase the amount you’ve paid on the principal, your equity increases. Your net worth will go up. Eventually you will have enough equity in your home to be able to borrow against it, should you need to.
Furthermore, in most parts of the country, home values tend to go up. If you ever find yourself needing to sell the home and move, you should make out quite well, provided you haven’t sunk a lot of money into remodeling.
You get tax benefits
You’ll appreciate being a homeowner rather than a renter on tax day. That’s because you can take a tax deduction on your mortgage interest as well as your property taxes. (You didn’t get a tax deduction for your rent.) You will have to itemize your deductions rather than taking the standard amount of deductions — and the cap on deductions has recently changed. Bottom line is you’ll have to do the math to see which approach benefits you.
Your costs will stabilize
If you took out a fixed-rate mortgage, you’ll find that your monthly costs are more stable than when you were renting. You won’t have a landlord suddenly raising the rent because he installed a new dishwasher. You won’t be subject to annual rent increases.
Because your payments are fixed, but inflation means all other costs go up a little bit every year, your housing payments will actually decrease relative to inflation. They will become a smaller and smaller portion of your expenses over time.
If you have any questions, drop in to benchenault.com, connect with us on social media, or pick up the phone and give us a call at (205) 986–4220.
We’re looking forward to hearing from you.
— Ben Chenault,
Certified Mortgage Planner
MortgageBanc / Fairway Nmls# 2289
Copyright©2019 Fairway Independent Mortgage Corporation doing business as MortgageBanc. NMLS#2289.4750 S. Biltmore Lane, Madison, WI 53718, 1–866–912–4800. All rights reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Lender. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, License No 41DBO-78367. Licensed by the Department of Business Oversight under the California Finance Lenders Law, NMLS #2289. Loans made or arranged pursuant to a California Residential Mortgage Lending Act License. Georgia Residential Mortgage Licensee #21158. Licensed Nevada Mortgage Lender.