For first-time homebuyers in Denver, it likely feels like a stretch to buy a luxury home. But if you are relocating to Colorado, buying a luxury home isn’t much of a stretch compared to renting. According to a recent report by Trulia reported in a Forbes article, owning is still less expensive than renting in 100 of the largest cities in America including many Colorado cities. The report showed it’s 38 percent less expensive to own than to rent on average in most cities.
If you are saving up to buy a home, you could be like a lot of first-time homebuyers who find it difficult to save while paying higher rent. Fortunately, new programs for first-time homebuyers don’t require 20 percent down. In fact, you could be eligible for a 3 percent down payment on a first home. As far as other benefits of home ownership in Colorado, it’s not just about the monthly rent versus the monthly mortgage payment.
You could save on taxes
When you itemize your taxes, you can deduct your mortgage interest. In some cases, the government also gives you a break on the money you spend on PMI or private mortgage insurance. If you take advantage of the mortgage certificate or MCC program you could receive an annual federal income tax credit as well. Your lender can help you figure out what first time home buyer programs are currently available that you qualify for.
Build equity
By owning a home, you build equity as well as your net worth. During a rapidly rising housing market like the one in Colorado, some home buyers find they have immediate equity when they close on their home purchase. In other cases, it could take a few years before your home is worth more than your initial investment. Most experts recommend you follow the 5-year rule by staying put for at least five years to make sure your home has time to appreciate in value.
Enjoy freedom
As a renter, you don’t have a lot of freedom. Your property manager or landlord might forbid you from smoking, painting the rental property, gardening, landscaping or having long-term guests. Once you own your own home, you can make any renovations you desire as long as they aren’t against local building codes. You can also invite family members to live with you if you don’t live in an age-restricted community.
First-time homebuyers can’t always see far into the future, but they may know friends or family members who have paid off their mortgages. Buying a home gives you a shot at one day being able to live in a home without a mortgage or rent. People who rent their entire lives often spend as much money or more, but never achieve that dream of a mortgage-burning ceremony before retirement.
By working with an experienced Realtor like me – one who knows the best Denver-area neighborhoods – you can find a luxury home that provides you with the lifestyle you’re looking for that’s also within your budget. Learn more about services for people relocating to the Denver area or contact me.