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Let us show you how
easy buying a home
can be! |
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Is Buying a Home Right For You?
Pride in
Owning:
Most people buy
homes to have control over where they live. Although investment
features are important, the psychological reasons for buying – the
satisfaction of owning and freedom from paying rent – are at least as
important.
A survey done
by the National Association of Realtors of 6,000 homeowners and 2,000
renters showed that 76% of owners and 66% of renters considered “pride
of ownership”03 an important reason for buying.
Dislike
Paying Rent:
Almost equal
portions of owners and renters – close to 7 in 10 – said that dislike
of paying rent was an important reason to buy. Renting offers a
lifestyle that’s nearly maintenance free. That may appeal to you, but
consider that renting offers you no equity, no tax benefits, and no
protection against regular rent increases. Writing a rent check is
just like watching your hard-earned money sail away!
Settling
Down:
More than 6 in
10 renters said “settling down” was an important reason to buy.
Good
Investment:
76% of owners
and 69% of renters said the investment aspect of ownership was
important.
Tax
Advantages:
Property taxes
and qualified home interest are deductible on Schedule A for itemized
deductions.
Long-Term
Appreciation:
People consider
home ownership a good investment because they view it as a long-term
venture. Historically, home prices have risen at relatively steady
rates. Existing home prices rose an average of 4% per year between
1980 and 1992.
Leverage
Investment:
People borrow a
great deal to buy a home, yet they receive the full benefits of price
appreciation. In the long run, investments in homes far outpace
inflation.
Source
of Savings:
Home ownership
always has and continues to comprise the single largest source of
savings for American households. Homeowners build equity and can
borrow against it.
Sacrifices are Worth It:
Almost 7 to10
renters in the NAR Home Ownership Survey said they planned to buy a
home in the future. More than three-quarters of these people said
they were willing to sacrifice to do that.
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Based on a 6% Rental Increase Each Year.
If you now pay…
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Per Month
For Rent Today |
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$300 |
$350 |
$400 |
$450 |
$500 |
$600 |
$700 |
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You’ll Pay |
You’ll Pay |
You’ll Pay |
You’ll Pay |
You’ll Pay |
You’ll Pay |
You’ll Pay |
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This Year |
$3,600 |
$4,200 |
$4,800 |
$5,400 |
$6,000 |
$7,200 |
$8,400 |
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Next Year |
$3,816 |
$4,452 |
$5,088 |
$5,724 |
$6,360 |
$7,632 |
$8,904 |
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3rd
Year |
$4,045 |
$4,719 |
$5,393 |
$6,067 |
$6,742 |
$8,088 |
$9,438 |
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4th
Year |
$4,288 |
$5,002 |
$5,717 |
$6,431 |
$7,147 |
$8,575 |
$10,005 |
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5th
Year |
$4,545 |
$5,302 |
$6,060 |
$6,817 |
$7,576 |
$9,054 |
$10,605 |
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6th
Year |
$4,818 |
$5,620 |
$6,424 |
$7,226 |
$8,031 |
$9,635 |
$11,241 |
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7th
Year |
$5,107 |
$5,957 |
$6,809 |
$7,660 |
$8,513 |
$10,210 |
$11,916 |
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8th
Year |
$5,413 |
$6,314 |
$7,218 |
$8,120 |
$9,023 |
$10,824 |
$12,630 |
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9th
Year |
$5,738 |
$6,693 |
$7,651 |
$9,023 |
$9,564 |
$11,472 |
$13,388 |
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10th
Year |
$6,082 |
$7,095 |
$8,110 |
$9,564 |
$10,138 |
$12,164 |
$14,192 |
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Total |
$47,452 |
$55,354 |
$63,272 |
$71,175 |
$79,094 |
$94,856 |
$110,719 |
Don't throw your hard earned money away...
Become a home owner this year!
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Five Great Reasons To Be
Pre-Qualified By A Lender
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You will know in advance what your
payments will be.
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You won’t waste your time
considering homes you cannot afford.
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You can select the best loan package without
being under pressure. There are many options to choose from in
today’s market.
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Sellers may find your offer to purchase more
favorable if they know in advance of your ability to secure
financing. This may make your offer more competitive if you are
in competition with others.
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Peace of mind.
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Understanding Closing Costs
Application Fee: Fee
charged by lender to offset fixed costs related to mortgage loan
processing such as appraisal, credit report, and underwriting.
Closing Fee: The fee charged
by the closing agent who prepares the closing documents and closes
the loan on behalf of the lender.
Commitment Fee: This is often
called an origination fee and is generally computed at 1% of the
mortgage amount.
Discount Points: Each point is
equal to 1% of the mortgage amount. Points are used by the lender
to adjust the yield on the mortgage when it is sold to an
investor. By paying more points, the borrower can obtain a lower
mortgage interest rate.
Funding Fees: Normally
applicable on VA loans only, equal to 1% of the loan amount. The
fee is due at closing or may be added to the loan amount and
financed.
Homeowner’s Insurance: One
year premium is due in advance at time of closing.
Mortgage Insurance: Insurance
required by the lender when the down payment is less than 20%. In
the case of loan default, this insurance reduces the lender’s
loss.
Pre-Payables: Adjustments to
escrow accounts from the date of closing to the date of the first
payment. Interest is paid through the end of the month of closing,
taxes are paid through the end of the month of closing plus the
following month. Two months of PMI are collected. Two months of
homeowner’s insurance may be collected. A homeowner’s insurance
policy must be provided along with a receipt showing that the
first year’s premium is paid.
Processing Fee: Fees charged
by the escrow processor, either working for the escrow company,
title company, or real estate company, for administrative escrow
services performed from the point of contact through closing.
Recording Fees: Fees charged
by state or municipal entities for entering the closing documents
into the public record.
Location Survey Fee: Is
usually required and is used by the lender to check for
encroachments from within or from outside the subject property.
Title Insurance: Provides
protection for lenders and homeowners against financial loss
resulting from legal defects in the title.
Underwriting Fee: Usually
included in the application fee. However, practices vary from
lender to lender.
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