Buying vs. Renting Your Home

Provided by Sharper Agent

Is now the right time for you to buy a home? You have many options to consider and choices to make. Buying a home is a big responsibility, financially and emotionally, but, most people want to own a home. Homeownership often is referred to as “the American dream.” Why is it so special? Among the reasons: Real estate often is an excellent investment, perhaps the number one source of wealth-building for families.

Owning a home has many benefits. When you make a mortgage payment, you are building equity - and that’s an investment. Owning a home also qualifies you for tax benefits that may assist you in dealing with your new financial responsibilities - such as homeowners’ insurance, real estate taxes, and upkeep - which can be substantial. But given the freedom, stability, and security of owning your own home, they are definitely worth it! Owning your own home also can be a great source of pride and stability.

But homeownership may not be for everyone. It’s a big financial commitment - starting with the initial shock of your purchase (including a “down payment” and fees paid to a real estate agent, the lender and others) followed by years of monthly mortgage payments, real estate taxes, property insurance and maintenance costs. When you decide to purchase a home, you accept responsibility for paying for these expenses. They are additional costs to your monthly mortgage payment and should be included in your budget estimates: Property Taxes and Special Assessments, Home/Hazard Insurance, Utilities, Maintenance, Home Owner Association (HOA) Fee if applicable.

One of the advantages of renting is being generally free of most maintenance responsibilities and the flexibility of moving almost as soon as you decide. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission and may be at the mercy of the landlord for your housing needs. There are many considerations in choosing between renting and buying:

• Do you want to spend several years in a house and in a neighborhood?
• Do you enjoy lawn and garden work?
• Might you need to move suddenly to care for family?
• Do you want to keep your assets accessible in the bank, or do you want to invest long-term in a home?

There are tax advantages to homeownership in both the short and long terms. The mortgage interest and real estate taxes are tax deductible, which allows you to subtract part of your housing-related expenses from your taxable income, which could reduce your tax bill. In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant.

Folks it is getting to that time of year once again when we are looking at updating and improving our homes. I found this article on Sharper Agent and wanted to share. It just may save the tylenol for another day!

The Most Essential Do’s and Don’ts for Choosing the Right Contractor

Americans spend billions of dollars on construction and home remodeling each year. Many homeowners have discovered that improving their present residence with an updated kitchen, an additional bathroom, new windows or a new roof can be a more prudent investment than purchasing a new residence. However, adding a room or updating a kitchen can cost more than a new car, and consumers should take some time and care in planning a costly home improvement project. Unfortunately, most consumers spend less time choosing a contractor than they do choosing a car. Here is a checklist of important things to consider before starting any major construction project:

The Do’s

Do plan your project carefully.
Do shop around before hiring a contractor.
Do get at least three written bids on your project.
Do provide all contractors with accurate plans or drawings that will enable them to determine the scope and cost of work when requesting bids.
Do check with the Contractors State License Board to make sure the contractor is properly licensed, and to check the status and disciplinary history of the license.
Do check out contractors with your local building department, trade associations or unions, consumer protection agency, and the Better Business Bureau.
Do look at work the contractor has completed.
Do ask your contractor to furnish a completion or contract bond.
Do consult with more than one lending institution regarding the type of loan to obtain.
Do ask your lender to recommend a funding-control company.
Do make sure your contract provides for a “retention,” a percentage of each payment or of the total job, ordinarily 10 percent, which you retain until the job is completed.
Do make sure everything you and your contractor have agreed to is included in your contract, and don’t sign anything until you understand and agree with all terms.
Do ask your contractor about inconveniences that may occur, and plan accordingly.
Do keep a job file.
Do make sure you receive unconditional lien releases from subcontractors and material suppliers.
Do make frequent inspections of the work, including a final walk-through.
Do consult an attorney if a mechanics’ lien is filed against your property.
Do negotiate with the contractor first if problems or disagreements occur.

The Don’ts

Don’t hire an unlicensed contractor.
Don’t hire a contractor without first shopping around.
Don’t be fooled or pressured by a smooth-talking salesperson. Take the time and effort to make sure that the person or business doing your home improvement is going to perform in a professional manner.
Don’t act as an owner/builder, unless you are very experienced in construction.
Don’t sign anything until you completely understand it and agree to the terms.
Don’t make agreements with subcontractors or workers without consulting the prime contractor.
Don’t pay cash without a proper receipt.
Don’t make a down payment that exceeds the legal limit, usually ten percent.
Don’t let your payments get ahead of the contractor’s completed work.
Don’t hesitate to ask questions of the contractor.
Don’t make final payment until you are satisfied with the job.