Homeownership In Arizona

Information by State  Esta página en español  Print version   Good Stories Community Home Repair Projects in Arizona Emergency home repair services have been provided to low-income homeowner/occupants in Tucson and Pima County for the last 25 years. More From HUD   Homebuyer's kit   How much home can I afford?   Let FHA loans help you   Your money, your home   How to buy a HUD home   Homebuying videos   FHA mortgage limits   Settlement and closing costs   More about owning a home   Home improvements   Refinancing home mortgages   Reverse mortgages   Help save my home   Fair housing   Approved mortgage lenders Links   Mortgage information from the Federal Reserve Bank   Loan programs for veterans   Is Homeownership right for you?   Homesales.gov

Owning a home is a big part of the American Dream. Here are some resources that can help you buy, maintain and keep your home. Getting Started   Housing counseling agencies  - free or low-cost counseling services for buying, renting, defaults, foreclosures, credit issues and reverse mortgages   Predatory lending  - beware if you're buying or refinancing your home; don't become a victim of unfair lending practices   Education - learn about buying and maintaining your home Buying a Home   Assistance programs  - resources and programs to help you buy and maintain your home   HUD homes for sale   Homeownership vouchers - some public housing agencies help you become a homeowner through the Housing Choice Voucher Homeownership Program   Fair Housing Laws Owning and Maintaining Your Home   Home repairs  - money for home improvements and repairs   Avoiding foreclosure  - don't lose your home   Make your home more energy efficient Other Arizona Resources   Housing resources for seniors   Legal assistance   Help with your utility bills   Disaster relief and emergency assistance   Health and environmental information  - safeguard your home and family   Rural housing programs   Arizona Department of Real Estate  - regulatory agency for real estate brokers and appraisers   State consumer protection  - consumer education and advisories   Foreclosure Clearinghouse - what local communities are doing

It Still Make Sense To Buy Versus Rent

Nearly a full third of households are still renting. If you’re one of them, you could be paying a hefty price.

Before talking about purchasing a house, it’s important to note two things. First—and this is extremely important—the housing market is actually localized. So the outlook in your hometown may be different than another city across the state or on the other side of the country. Second, home prices are tied to employment. For example, if someone feels like their job is in jeopardy, it might be enough to stop them from making a move. So, if your local job market is feeling a pinch, the home prices in your area may be down as well.

But with all those factors under consideration, it still makes sense to buy instead of rent. In fact, renting may be costing you a bundle.

Let's look at an example…

If you are paying rent at $1,500 per month and your landlord increases your payment by a modest 5% each year, you would wind up paying just about $100,000 over a 5-year period! Worse yet, after forking over $100,000, you still would have nothing to show for it.

And speaking of having nothing to show for it, how about any improvements you might make to a rental property? It's not uncommon for renters to freshen up the paint, install new light fixtures or plant some nice flowers outside. But guess what… all your efforts, labor and the benefit of that improvement belong to the landlord, not to you.

With convenient down payment options still available for qualified buyers, affordable home prices and low interest rates, the very same money could have been used towards home ownership.

Even using a standard 30-year fixed program, a mortgage of $300,000 could be obtained with a total monthly mortgage payment—including property taxes and insurance—of around $2,200. Assuming a 25% tax bracket, this would be equivalent to the average amount spent on rent during the same period after your tax benefit.

And the benefits of home ownership are quite considerable. Because the mortgage is being paid down each month, equity is being built. After 5-years, the $300,000 mortgage could be reduced to $279,000, adding $21,000 to your net worth!

But if laying out the initial increase in monthly payment and having to wait for your tax benefit to show up next April is a tough nut to crack, the IRS wants to help. Instead of waiting to file for the tax benefits derived from your new home purchase, you can simply adjust the amount of your withholding. This allows you to have less tax withheld from each paycheck so you can handle the new mortgage payment more comfortably throughout the year. In essence, you are taking your tax refund as you go instead of letting Uncle Sam hold it all year, interest free.

Visit www.irs.gov and use the IRS withholding calculator. This very handy tool can quickly show you the impact that a change in withholding will do to your net paycheck. Remember to balance this with the expected refund and it is always a good idea to check with your tax advisor.

Don't fall victim to the national headline hype. Talk to a professional who understands your local market. And remember, buying a home is a big step, but it is almost always one in the right direction.