By Neena Vlamis, President of A and N Mortgage

Waiting until you’ve saved enough for a large down payment could be a good move in some aspects. However, buying a home now could put you ahead in a few ways. Be sure to calculate the interplay of all factors. These include your credit standing, your current (and future) monthly rental payments, your rate of savings, and the price of a home you’re likely to buy. Find out how these factors interact, and you can make the best overall decision.

What are the likely effects of investing in purchase now versus holding out until you build up more in savings? The answers may surprise you. Those rent payments are going to add up while you wait. And rent payments build no equity.

An FHA Loan Could Be Right for You

A loan insured by the Federal Housing Administration will give you a fixed interest rate. Locking in the current rate can be a smart investment.

Unlike most conventional loans, a loan insured by the FHA is assumable. If you finance the purchase of your new home with an FHA-insured loan and need to sell a few years later, you can offer the next buyer the option of taking on your FHA loan. Depending on the prospective buyer’s circumstances, this can be a significant attraction to a prospective buyer.

Make Your Retirement Account an Early Hero

Do not overlook your individual retirement account (IRA) in your financial planning. But what about the early withdrawal penalty?

Remember, for the first $10,000 you remove from a traditional IRA, the early withdrawal penalty can be waived. Internal Revenue Code Section 72(t)(2)(F) permits you to apply for the waiver. A relative, such as your spouse or your parent, can also qualify for that exemption when helping you make the purchase. It’s prudent to check with your tax advisor on how the tax code works for first-time home buyers.

Additionally, important tax deductions are available when you become a homeowner.

We’re Standing by to Assist You

If you’ve been waiting to increase your savings before buying your first home, you might be surprised at the benefits of buying now. Home ownership is a feeling like no other. And making the move sooner rather than later could spare you thousands of dollars in rent payments. Buying means building equity for your future.

To get an overview of tax and other factors, our mortgage calculator tools will help get you oriented. And consult our mortgage tips for loan and relocation advice and support.

Ready to apply for a home loan? Get a home loan pre-approval with our online mortgage application.

We encourage you to contact A and N Mortgage with any questions you have. We take pride in giving our customers the reliable and proper guidance they will need in financing their first home.

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