Real Estate Tips for Home Buyers

According to the website zillow.com, homes increase in value two to five percent per year.  That is the typical expected increase in normal economic times. Unfortunately, these are not normal economic times. In fact, real estate values have declined for five consecutive years.

For this reason, it is suggested that if you are not planning on inhabiting a house for at least five to seven years, buying may not be your best plan. This is because you will want to allow time for your house to appreciate to a point where it will cover your closing costs, at minimum.

That being said, if you are planning on settling down, take advantage of the price decline while you can. Get back to the basics of home ownership. Save up your twenty percent down payment and actually inhabit a house for a long while. When acquiring a home in such a manner, you will realize some fringe benefits.

One major benefit is that you will be making money by using someone else’s money.  No other legal investment allows for this. However, this is exactly what happens when you give your house the time to appreciate in value and then you sell for profit. The majority of mortgages are not going to increase, but the value of the home will.

Lucrative tax benefits come along with your home purchase. As soon as you move in, the IRS begins with the gifts. You will be able to deduct interest paid on your mortgage from federal income taxes. The government wants to support home ownership. Therefore, the capital gain tax on a home is free up to the amount of $250,000 for individuals and couples cap out at $500,000.