To Rent or To Own?

You may have considered home ownership, but never quite had the means to make it happen. However, with your annuity, you might seriously be thinking about making the jump to home ownership. Here are some facts that might help you decide if buying is right for you.

Equity

Perhaps the biggest bonus to homeownership is that you are not paying someone else’s mortgage. When you buy your own home, you start to build equity, which then can add to your own financial security. The place is yours, and barring increases in your escrow payment, the payments will stay steady for the life of the loan.

Equity is the asset you will build as you pay off the principal (not the interest) on your home. The more of the principal you pay off over time, the higher your equity in the value of your home will be. Should your home increase in value (or “appreciate”), your equity will go up even more quickly.

Making Improvements

Many things you do to your home as a homeowner can help to increase its value. As a renter, even if you are allowed to make improvements, you will get nothing back as compensation when you leave. The value is absorbed by the owner.

Taxes

Purchasing your home includes tax implications. Depending on where you purchase, you are subject to different taxes that will increase your yearly escrow payment. These can impact your monthly payments over time, but not significantly.

On the flip side, however, homeowners are also subject to sometimes significant deductions on their mortgage interest when it comes time to do taxes.

Extra Considerations

Renting does have its own comforting assurances. If something breaks or needs fixing, it is not a renter’s obligation to have it repaired. As a homeowner, leaky pipes, an AC on the fritz or a broken hot water heater are all your responsibility and repairs come out of your pocket.

When you are purchasing your home, it is important to understand that the sticker price isn’t all that you pay. Additional taxes and fees are due at signing. There will be extra costs for things like home inspection, bank origination fees and real estate transfer taxes.

And there are other monthly costs beyond the principal and interest payments. Homeowners will also have to pay homeowners’ insurance, property taxes, and in some instances, homeowners or condo association fees.

Wellbeing and Belonging

If you have had a number of different apartments or homes, it is hard to build a sense of belonging in any community. But if you put down roots, you become part of a neighborhood that you will start to care about and become involved in.

Many homeowners speak about feeling “grounded,” which comes from the stability of actually owning their own home. Knowing that the place is yours and that your landlord will not raise your rent (or ask you to leave if he decides to sell it to someone else) brings about a different sense of security and wellbeing, too.

If you are looking to turn your future annuity payments into a down payment on a home, SenecaOne can help to make that a reality for you.

Contact one of our Specialists today at 1-800-531-1394 to discuss how your annuity can be turned into a cash-flow solution that will make homeownership a reality.

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