Do mortgage buydowns really make mortgages more affordable?
With mortgage rates where they currently are, homebuyers are looking for any edge they can possibly get in the market. Mortgage rate buydowns are often a popular choice, but do they really make mortgages easier to afford? The short answer is, yes.
A mortgage rate buydown is a concession that a sellers or builders make with buyers. This concession allows the buyer to pay a lower mortgage rate for the first year or first few years of a mortgage, and then get an adjusted rate after the initial period ends.
The biggest advantage is that a buydown gives a homebuyer a period with a mortgage rate that’s below the current market. In an ideal situation, mortgage rates would trend downward during the initial period, and enable a homeowner to refinance to a lower rate after the initial period.
If you still have questions about mortgage rate buydowns, speak with a mortgage expert to get additional information.
Which market is the most expensive in the world?
It’s actually now pricier to buy property in New York City than it is anywhere else in the world. Given the current strength of the US dollar, and where prices on real estate have gone, it’s no wonder that the Big Apple is the most expensive real estate market on the planet.
“Despite rising economic headwinds and growing uncertainty, the world’s wealthy have been committing to luxury residential property, with London and New York the standout cities in demand for ultra-prime sales,” said Liam Bailey, global head of research at Knight Frank.
For comparison’s sake, $1 million can buy 355 sq. ft. of real estate in Manhattan. The same amount in London would get you 365 sq. ft. of property.
Are there tax benefits to owning a home?
Owning a home enables homeowners to build equity, but homeownership also provides a break when it’s time to do your income taxes.
The most significant tax break available to homeowners is the ability to deduct mortgage interest. If you have a mortgage, this will impact you. The entire portion of your interest is tax deductible.
In addition to mortgage interest, it’s also possible to deduct real estate taxes, home improvement costs, home office costs, and potentially other costs from your income tax return. If you have questions about how to handle deductions related to your home, it’s best to consult with a seasoned tax professional.*
* Guaranteed Rate does not provide tax advice. Please contact your tax advisor for any tax related questions.
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