It’s the end of the year and that means new goals are being made for many Metro DC residents. One of these goals may include buying a home— making the switch from renting to homeownership! It’s an exciting time for Washington DC area buyers to jump into the market, although with mortgage rates higher than they have been over the past year, you may be wondering where to start.
Starting a budget and saving for your down payment are helpful first steps to take, but renters should also take the following into consideration as they begin their home buying journey:
Research the total costs of homeownership
Buying a home in Washington DC, Bethesda, Chevy Chase, or Northern Virginia is a big step and it’s important that potential buyers understand all of the costs involved. When you rent a home, one payment covers your monthly housing costs. When you own a home, your payment covers your principal, interest, taxes and insurance.
Use a mortgage calculator to help determine how much home you can afford when you factor in each of these components of a monthly mortgage payment.
Know the tax benefits of homeownership
When you file a tax return, your mortgage interest and property taxes are deductible. Making these deductions can lower the cost of homeownership. For instance, if your monthly payment with principal, interest, tax, and insurance factored in is $2,500, tax deductions could bring it down to around $2,200.
Research the cost difference between renting vs. buying
In order to get a true comparison of the costs of renting and buying, you need to look at overall homeownership costs. Renting can be very predictable, with renters paying the exact same price for the length of their lease— no surprises.
However, homeowners will have additional expenses including maintenance and repairs—for instance, an unexpected leak in the roof—that can catch you off guard if you’re not prepared. While you do have extra costs from time to time, building equity in your home is a benefit that renters just do not have.
The Estridge Group is here to help you make a smooth transition from renting to owning a home in the DC Metro area.
Contact us today with any questions you have about the home buying process and how to get started!
