Blog Archive for December, 2010

8 Reasons to Buy a New Home

Categories: Featured, Master Builder Musings | Posted: December 24, 2010

If you’re like most first-time home buyers, you’ve probably listened to friends’, family’s and coworkers’ advice, many of whom are encouraging you to buy a home. However, you may still wonder if buying a home is the right thing to do. Relax. Having reservations is normal. The more you know about why you should buy a home, the less scary the entire process will appear to you. Here are eight good reasons why you should buy a new home.

Pride of Ownership

Pride of ownership is the number one reason why people yearn to own their home. It means you can paint the walls any color you desire, turn up the volume on your CD player, attach permanent fixtures and decorate your home according to your own taste. Home ownership gives you and your family a sense of stability and security. It’s making an investment in your future.


Although real estate moves in cycles, sometimes up, sometimes down, over the years, real estate has consistently appreciated. The Office of Federal Housing Enterprise Oversight tracks the movements of single family home values across the country. Its Housing Price Index breaks down the changes by region and metropolitan area. Many people view their home investment as a hedge against inflation.  Texas is one of the states that lead the Nation here.

Mortgage Interest Deductions

Home ownership is a superb tax shelter and our tax rates favor homeowners. As long as your mortgage balance is smaller than the price of your home, mortgage interest is fully deductible on your tax return. Interest is the largest component of your mortgage payment.

Property Tax Deductions

IRS Publication 530 contains tax information for first-time home buyers.  Real estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes.

Capital Gain Exclusion

As long as you have lived in your home for two of the past five years, you can exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains. You do not have to buy a replacement home or move up. There is no age restriction, and the “over-55” rule does not apply. You can exclude the above thresholds from taxes every 24 months, which means you could sell every two years and pocket your profit–subject to limitation–free from taxation.

Preferential Tax Treatment

If you receive more profit than the allowable exclusion upon sale of your home, that profit will be considered a capital asset as long as you owned your home for more than one year. Capital assets receive preferential tax treatment.

Mortgage Reduction Builds Equity

Each month, part of your monthly payment is applied to the principal balance of your loan, which reduces your obligation. The way amortization works, the principal portion of your principal and interest payment increases slightly every month. It is lowest on your first payment and highest on your last payment. On average, each $100,000 of a mortgage will reduce in balance the first year by about $500 in principal, bringing that balance at the end of your first 12 months to $99,500.

Equity Loans

Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18% to 22%. Equity loan interest is often much less and it is deductible. For many home owners, it makes sense to pay off this kind of debt with a home equity loan. Consumers can borrow against a home’s equity for a variety of reasons such as home improvement, college, medical or starting a new business.

-Ron Formby


Categories: Featured, Master Builder Musings | Posted: November 17, 2010

My last reflection was about this being the best time to purchase a new home.  When you combine that and Rent VS Owning, it even gets better.  Look at this site and it is all you need to make the best case that owning a new home is much better than renting.

I have been saying owning is better than renting my entire working career, but now the New York Times has provided one of the best examples I have ever seen.  It is eye opening to see how much savings you can keep if you own instead of rent.  My favorite saying is “Renting is helping pay for someone else to Own what you are renting!”  Your apartment will never be paid off.  Why not take advantage of that today and start accumulating some savings and equity assets? 

There are many other Rent VS Own calculators on the internet and they all show the same results.  It has never been better to own than rent today.  At Antares Homes we have the best Sales Consultants in the market that can help you make the right choice for a new home and provide a lender that can help you obtain the financing needed to start saving instead of renting.