Now may be time to buy, not rent

But in times like these, owning your own home deserves a second look. Here’s why:

● If you are paying near a thousand dollars a month in rent, you may very well be able to save monthly by purchasing. Today’s combination of super low interest rates and soft asking prices are making monthly payments extremely affordable — and we are talking about fixed rate loans here, not the “sucker punch” loans of recent years that got you in the door then kicked you in the teeth. These loans are fixed for no less than 30 years, so you have the assurance that your monthly payments of principal and interest will never increase over the life of the loan.

● As of Jan. 1, 2009, the FHA loan program was modified to be more attractive to borrowers. You can borrow as much as 96.5 percent of the purchase price of the house, and your interest rate is still almost identical to conventional rates. And FHA loans allow credit scores to be lower and debt ratios to be higher than most conventional loan programs.

● The largest part of your payment in the early years of a real estate loan is interest. In the first year of payments, the interest portion of your loan payment will account for just over 80 percent of your monthly payment. That interest payment is likely tax deductible, and so is the payment you make for property taxes.

● Finally, if you are a first-time home buyer or if you are willing to purchase a qualifying bank-owned home, you may qualify for a federal or state tax credit, up to a combined total of as much as $22,000. Talk with your real estate professional about these programs.

Each of these features is helpful, but together they are making for a pickup in real estate sales activity across the nation. If you have been sitting on the fence or waiting to see if rates or prices would get lower, this may be your call to action. Don’t wait too long. The incentive programs are set to expire later this year, and interest rates will likely be higher in the future.

John Adams is a broker and investor. He answers real estate questions on radio station WGKA (920am) every Saturday at noon. For more real estate information or to make a comment, visit John Adams.

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