By Heather Mullinix / hmullinix@crossville-chronicle.com
I finally did it. I finally decided to settle down and buy my first home.
Last month, I signed on the dotted line and became one of a growing number of first-time home buyers.
Now, I'm going through box after box after box of belongings I have carted from one apartment to the next. I've toyed with my furniture, trying to find the "right" way to situate the couch and the TV and my bookcases. I've organized my kitchen and even — gasp — mowed the lawn.
It's a big change for me. For the past 10 years, I've lived in rented quarters. This had numerous benefits I enjoyed. Not being that handy, the thought of having to fix something when it broke was terrifying. And, if you didn't guess from my reaction above, lawn work isn't something I enjoy.
But the benefits are tremendous.
No neighbors on the other side of the wall. No one telling me I can't hang a picture here or there. If I wanted to paint a room red, I could. Come spring, I can plant flowers and landscape, if I could just figure out what should be planted where.
Why did I finally decide to take that leap of faith and join so many others in the hunt for the "American Dream"?
I won't lie. The lure of an $8,000 tax credit for first-time homebuyers was a draw.
But it was more than that. I was ready. I was tired of renting. There really is something to that "pride of ownership" idea, and the sense of stability and security owning a home can bring.
Don't get me wrong. The night before my closing, I was near panic attack levels. I mean, a 30-year mortgage? Oh. My. God. How could I consider it?!?! Thirty years. Thirty years. Thirty years. It just kept repeating in my head.
But, I have to live somewhere. And someone will be collecting money from me for that roof over my head. I once added up how much I paid in rent during my stay at one apartment complex. After six years, the number made me just a little ill to my stomach.
That's where the next big reason to buy a home came into play. Appreciation and equity. If you rent, you have no equity. You get no benefit from a property's appreciation through the years. You can't deduct mortgage interest. You can't deduct property tax. Sure, you never wrote a check to the county trustee for property taxes when you rented, but you can be sure that was figured into your monthly rent.
A home is an investment. And it's one I'm glad I made.
And readers, if you've been thinking about taking that homeowner leap, I have some advice for you.
Get moving.
There's a deadline on that $8,000 first-time homebuyer tax credit. If your loan doesn't close by Nov. 30 of this year, you will be out of luck. And, it can take 60 days to close a mortgage — after you've found a house and had an offer accepted.
The tax credit is available only to first-time homebuyers, or those who have not owned any interest in a home in the past three years. It's actually a credit of 10 percent of the purchase price, up to a maximum of $8,000.
The tax credit does not have to be paid back, as long as the buyer continues to use the property as his or her primary residence for three years. If the home is sold or the person moves before that time, the credit must be repaid.
Single taxpayers with incomes up to $75,000 or married couples with incomes up to $150,000 qualify for the full tax credit.
That said, there are some practical considerations. Simply wanting to own a home isn't enough to actually get you the keys.
First — are you ready to stay in one spot for a little while? There is a cost to buying a house beyond the mortgage amount. If you aren't willing to settle down for several years, you may be better off continuing to rent.
You'll need a steady income and you should have a credit history as clean as possible. If you haven't done so, go ahead and get your free annual credit report. It's available online through www.annualcreditreport.com. You won't see your credit score there, but you can check for any mistakes or inaccurate information. If you find any, you can start getting those cleared up. Even if you aren't in the market for a new home, you should be keeping an eye on your credit report, anyway.
Next, get your bills and paychecks together. See how much you can actually put toward a mortgage principal and interest payment and escrow items, such as homeowners insurance and taxes.
Work with banks or mortgage lenders to get pre-approved for a mortgage. This will give you an idea of just how much you could expect to be able to borrow and help narrow your house search. You don't want to go look at the beautiful, sprawling house with the pool, the lake front property and seven bedrooms when you won't be able to afford it.
Start thinking about the things you want in a home. Is less then two full baths a deal breaker? Or is the large yard just too much for you to take care of? These are things to consider.
A real estate agent can help you find homes in the area you would like to live, and keep in mind your budget and your wish list. Looking for homes is exhausting. It's good to have someone helping you keep the list of prospective homes manageable.
Now, I've got to get back to furniture arranging. If I could just move that there, then I could move this here and that....
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Heather Mullinix is the Crosville Chronicle assistant editor. Her column is published periodically. She may be reached at hmullinix@crossville-chronicle.com.
