For
many people, the thought of buying a home can be frightening.
But it is only frightening when you are alone in an unfamiliar
place. Well, here's some good news. Home ownership in America
is at record levels, with many of them first time buyers, just
like you. And the best news, you are not alone. Your Bellamy
Team associate will lead you through the home buying process,
helping you every step of the way. We know what to expect on
most occassions, and we will share that experience with you.
You
probably have many questions. And every question is a good one.
Questions like should you buy now or just keep renting, how
much cash will you need, can you do this yourself or do you
need a REALTOR, just to name a few. Well, we are glad you asked.
"Why
should I buy, instead of rent?"
With every rent check you write, you're helping to build equity
in someone else's property, most likely your landlord. That
money could be going toward building equity in a home of your
own. Today's interest rates are low enough that your house payment
could be lower than your current rent payment!
There
are many advantages to owning a home, including:
Satisfaction
- Home ownership offers special advantages that make life more
enjoyable - backyard barbecues, large family gatherings during
holidays, a home workshop, a chance to enjoy your family's companionship
in the privacy of your own home. You'll love the feeling of
having something that's all yours - a home where your own personal
style will tell the world who you are. A thriving vegetable
garden in the backyard, a tiled entryway, a yellow kitchen...when
you own, you can do it all your way! But there's more to owning
a home than personal satisfaction…
Security - A feeling of security that comes
from owning a home and the knowledge that your home is a safeguard
against inflation.
Investment - Payments on your mortgage loan
mean you are acquiring a major possession; instead of rent,
you own more and more. The garden you plant, the permanent improvements
you make - all enhance your way of living as well as the value
of your home. Another financial plus in owning a home is the
possibility its value will go up through the years.
Tax Advantage - Your real estate taxes and
the interest on your mortgage are deductible from your income
tax. You can deduct the cost of your mortgage loan interest
from your federal income taxes. And interest will compose nearly
all of your monthly payment , for over half the number of years
you'll be paying your mortgage. This adds up to hefty savings
at the end of each year. And you're also allowed to deduct the
property taxes you pay as a homeowner. If you rent, you write
your monthly check and it's gone forever.
Financial Independence - Most people start
on the road to financial independence through home ownership.
Your principal and interest payments remain the same for the
full term of your mortgage while your rent usually goes up as
the cost of living increases.
Environment - Your children grow up in the
neighborhood of your choice.
Cash Equity - Better than a savings account,
your home can appreciate to keep pace with inflation.
"How
much money will I have to come up with to buy a home?"
Well, that depends on a number of factors, including the cost
of the house and the type of mortgage you get. In general, you
need to come up with enough money to cover three costs: earnest
money - the deposit you make on the home when you submit your
offer, to prove to the seller that you are serious about wanting
to buy the house; the down payment, a percentage of the cost
of the home that you must pay when you go to settlement; and
closing costs, the costs associated with processing the paperwork
to buy a house.
When you make an offer on a home, your real estate broker will
put your earnest money into an escrow account. If the offer
is accepted, your earnest money will be applied to the down
payment or closing costs. If your offer is not accepted, your
money will be returned to you.
The more money you can put into your down payment, the lower
your mortgage payments will be. Some types of loans require
10-20% of the purchase price. That's why many first-time homebuyers
turn to HUD's FHA for help. FHA loans require only 3% down -
and sometimes less.
Closing costs - which you will pay at settlement - average 3-4%
of the price of your home. These costs cover various fees your
lender charges and other processing expenses. When you apply
for your loan, your lender will give you an estimate of the
closing costs, so you won't be caught by surprise. If you buy
a HUD home (http://www.hud.gov/offices/hsg/sfh/reo/reobuyfaq.cfm
) HUD may pay many of your closing costs.
"Do I Need a REALTOR® ?"
A real estate transaction is complicated. In most cases, buying
or selling a home requires disclosure forms, inspection reports,
mortgage documents, insurance policies, deeds, and multi-page
government-mandated settlement statements. A knowledgeable guide
through this complexity can help you avoid delays or costly
mistakes. and make the experience much easier.
Finding the right home is time consuming. With immediate access
to homes as soon as they're put on the market, your REALTOR
can save you hours of wasted driving-around time.
Real estate has its own language. If you don't know a CMA from
a PUD, you can understand why it's important to work with someone
who speaks that language.
REALTORS® have done it before. Most people buy and sell
only a few homes in a lifetime, usually with quite a few years
in between each purchase. And even if you've done it before,
laws and regulations change. That's why having an expert on
your side is critical.
REALTORS® provide objectivity. Since a home often symbolizes
family, rest, and security, not just four walls and roof, home
selling or buying is often a very emotional undertaking. And
for most people, a home is the biggest purchase they'll every
make. Having a concerned, but objective, third party helps you
keep focused on both the business and emotional issues most
important to you. If you would like more information on the
benefits of having a Realtor represent you in the purchase of
a new home, contact The Bellamy Team.
For
specific questions about the home buying process, ask your Bellamy
Team sales associate.
