Are you considering buying a house? Homeownership is part of the classic American Dream for many, and it has many financial and emotional benefits. But is now the right time? And if so, how should you go about it? Here are some important questions an accountant can help you answer.
1. Do You Have a Workable Budget?
A lot of people don't like the idea of budgeting. But it's one of the most important ways to ensure success as you embark on homeownership. The benefit of an accountant during this process is that they are experienced in drafting budgets for organizations of all sizes and they are an independent third party. They can ask the questions and make the observations you may not want to.
2. Is Your Down Payment Right?
How much should you put down on your purchase? An acceptable down payment for today's homeowners can be very large or very small. Should you put down more and have a lower payment or save that cash for emergencies? Get a second opinion from a financial professional to decide how to strike the right balance.
3. What Terms Should You Pick?
There are many decisions to make when you seek a mortgage loan. A shorter term can save you thousands of dollars compared to the standard 20- or 30-year loan. Is the savings enough to offset the higher loan payments? Should you opt for an adjustable or fixed rate? What is the break-even point for closing costs? And should you plan to refinance soon? This can be a lot of math for the ordinary person, but an accountant is used to running scenarios.
4. Will It Help Your Taxes?
One of the most common beliefs when buying a home is that it will reduce your tax bill. However, this isn't always true. Many American taxpayers claim the standard deduction, which doesn't change with homeownership. On the other hand, the tax benefits can be a big boost for others. Find out what you might get out of buying a home when it comes to tax time.
5. What Other Goals Do You Have?
While homeownership is a great goal, it probably shouldn't be the only one you have. Are you making progress toward other financial goals, such as paying off student loans or planning for retirement? Accountants have experience working with multiple goals and needs at the same time. They'll work with you to gain confidence that your home will not derail other needs.
Where to Start
Could you use assistance in answering any of these questions? Start by learning how an accountant in your local area can help.