WHY BUY?

BENEFITS OF HOME OWNERSHIP

(CURRENT VALUATION) – (YOUR PURCHASE PRICE) = EQUITY YOU HAVE BUILT! In the example above: $75,000 (current valuation) – $50,000 (purchase price) = $25,000 in equity!

Real estate markets go through up and down cycles, and home prices are subject to general economic factors. But, while with renting you’re guaranteed never to own the place where you live, with home ownership you’re building equity and your future. As the value of your home increases, as it has in the vast majority of homes across the country over the past several decades, your equity goes up in value and you become wealthier.

This, in a nut shell, is the American Dream. You can use this dream to finance your child’s college education, make investments in other properties, protect against unforeseen events, and prepare for retirement. As you build equity, you build a solid foundation towards a more secure future.

Save Money on Taxes!

One of the primary keys to building significant wealth is sheltering tax expenses. And few tax strategies are more potent than home ownership.

To begin with, you can deduct mortgage interest in its entirety when calculating your federal income taxes. This enormous tax savings can add up to tens of thousands of dollars each year. Most states will also permit the deduction of mortgage interest from state income taxes. In addition to mortgage interest, you can deduct property tax payments as well.

How much savings does this really translate into? For a typical mortgage, interest comprises the vast majority of the payment in the first half of the repayment period. For example, interest is the bulk of each payment for the first 15 years of a 30-year mortgage.

(MONTHLY PAYMENT) X (12 MONTHS) = (AMOUNT OF INTEREST PAID DURING TAX YEAR)
(INTEREST PAID) @ 30% TAX BRACKET = TAX SAVINGS

In the example above:
$550 (Monthly Payment) x 12 Months = $6,600 (Approximate amount of interest paid)
$6,600 (Interest Paid) @ 30% (Tax Bracket) =$2,000 (Tax Savings)

Let’s say you buy a house for $100,000. You put $20,000 down and get a 30-year mortgage for $80,000 at 7.0%. If your monthly payment is about $550 per month, substantially all of that amount could be interest at the beginning of your mortgage period. Over one year, that’s $6,600 in deductible mortgage interest. If you’re in a 30% federal (and state) income tax bracket, that could translate into about $2,000 in savings for that year!

Moreover, in some states, new homeowners can face steep property taxes that could be as much as $5,000 to $10,000 per year. This amount is completely deductible as well. Similar to the example above, if you’re in a 30% tax bracket and pay $5,000 in property taxes you could save $1,500!

If monthly cash flow is an issue for you, home ownership enables you to adjust your income tax withholding amount. The result can be a significant amount of money through your mortgage interest deduction that appears in your regular paycheck. You can use these savings to make your mortgage payment comparable to what would have been your monthly rental payment.

While exploring the powerful tax and other financial advantages discussed in this guide, be sure to speak with your accountant or financial advisor to develop the ideal financial strategy for your specific goals.

Once You Own One Home, You’re on the Wealth-Building Road to a Better Second Home

When you buy a home, you may save significant money in taxes and build equity. Over time, your savings and equity could increase considerably. This is value that you can use to your advantage. If you sell your home for a profit, you can use that money plus your tax savings to invest in another home. Remember, this is value you’ve built not through day-to-day work but just through home ownership. It is value you’ve built while you were sleeping, while you were spending time with your family, while you were eating dinner. And now you can use it to buy a bigger house in a better neighborhood. And after you own that house, you can repeat the process all over again to move on to a bigger, better third home. The possibilities are endless with home ownership.

You Need to Own a Home! Freedom, Security and Prestige are Within Your Grasp

When you rent, you are subject to your landlord’s rules and whims. The landlord decides whether you can own pets, paint your interior, add another bedroom, improve your plumbing – the list can go on forever. Being at the mercy of a landlord in this fashion can be a constraining frustrating way to live. As a homeowner, however, you answer to no one except yourself. If you want to paint your home yellow, you can do it. If you want to remodel your kitchen, nothing’s stopping you. If you want to have two dogs and three cats, no one can say “no” to you. For each and every day of your life in that home, you set the rules and are in control of how you live. This freedom is priceless.

Additionally, with a mortgage you know exactly what your payments will be each month. You’re not surprised with sudden rent increases or eviction notices. Imagine the peace of mind and security you will obtain when you can budget your expenses without the fear of increasing rents.

In addition to your freedom and security, you will gain pride and prestige. As a homeowner, you truly own a piece of the American Dream. This fosters a sense of community and kinship that is powerful and inspiring.

Bargains Are Waiting For You Now – We’ll Help You Find Them

CRN also provides you with yet another reason to buy a home: access to listings that may potentially save you thousands of dollars. With the CRN packet you have just received, you may find a number of bargain-priced homes. Some of these categories of listings, such as foreclosures and FSBO properties, are discussed later in this brochure. Furthermore, updated listings are available online at http://www.crnhome.com/ or by calling our friendly customer support representatives at 800-511-4236.

Note: Availability of and savings on distressed properties may vary based on market conditions and location.