Q: I am tired of renting but don?t quite have a down payment together yet. I already have an apartment that I lease but the lease agreement ends in August. I would really like to be in an actual home instead of an apartment building. I would like to know if this is a smart investment/option for me to pursue.
?Nikola, Glen Burnie, MD
A: Sit down with your financial adviser and see if home ownership is right for you. Also there are rent vs own calculators on many websites such as Realtor.com, Bank Rate.com, just do a search.
Some things to consider: 1. How long do you plan to stay in the same area, if less than 3-5yrs buying a home might not make sense due to the cost of purchasing and selling in a short time. 2. Can you buy a home that will fit your current and future needs? For example if you are planning to have children in the next 5 years you may not want a 1 bedroom condo that you will instantly out grow. 3. Interest rates have never been better, so this could be your first step to some long term goals. 4. There is not much better than having a paid off home by the time you retire, if that is your goal. 5. Speak with a local lender, in my area we still have 100% financing loans, if you were in the military you may qualify for a VA loan. An FHA loan requires only 3.5% down and some can be gift funds, you may be surprised at what is available.
For many home ownership provides stability, no landlord to decide to raise the rent or sell the property from under you or not renew your lease. For others that like to move a lot or don?t want to worry about maintenance & yard work home ownership may not be right.
Good luck
Teri Andrews Murch is a Realtor? with Lyon Real Estate in Auburn, CA.
A: Right now is a wonderful time to purchase a home: home prices are low, interest rates are low, and there are loan programs for buyers with low down payments.
Low interest rates means that your monthly payment will be lower; a $100,000 loan at 4.25% fixed rate interest has a 30-year payoff at just under $492 per month, while that same loan at 7% fixed rate interest would be $665.30 per month and more than $877.50 at 10% fixed rate interest (which once was considered a good interest rate!). You?ll either have a lower monthly payment -or- be able to purchase a better home, than if interest rates were higher.
FHA loans require 3.5% downpayment and have additional closing costs. Sometimes the seller will contribute 3% (occasionally even more), which reduces the amount of cash you need upfront to purchase a home. To maximize your opportunity, start saving every penny now; you?ll be surprised at how fast it can add up, especially if you eliminate some daily expenditures (such as special beverages) and reduce entertainment cost (watch a movie on TV instead of going out, spend an afternoon at your local (and free) park instead of going to an entertainment facility. This won?t last forever ? and every dime you save is a dime closer to your new home!
You will find it very satisfying to own your home, rather than rent!
Debra Kroon is a Realtor? with Yosemite West Real Estate in Yosemite, CA.
A: Owning is absolutely a smart investment option. Not only are you able to gain tax benefits, but the money you pay each month will go toward your own mortgage instead of someone else?s.
You mentioned not quite having your downpayment ready. What amount of downpayment are you contemplating? Loans typically require anywhere from 3.5% to 20% down, depending on the type of loan, type of property, and your credit score.
Even if you don?t have enough funds for a downpayment and closing costs yet, now is the time to find a lender you like. Find someone who will patiently guide you as a first-time home buyer. Your lender can help you make sure your credit scores are high enough and guide you toward repairing things on your credit report that may be negatively affecting your scores.
Your lender will also let you know exactly what price home you can consider buying and what how much to save for down payment and closing costs.
When you are considering home buying, your first step is to get your lending in place. The easy part will be finding the right home!
I hope this information is helpful,
Denise
Denise Shur is a Realtor? with 1:1 Realty in San Jose, CA.
A: Oh my ? you are just throwing money away being in a rental. Right now with the way prices are and the interest rates, you will most likely pay the same amount and end up OWNING a property instead of throwing money away each month. There are 100% loans and in many cases you can ask a seller if they are willing to pay your buyer loan and closing costs?so your best bet is to get started now ? Go see a lender?find out what you can qualify for ? find out if you can get a 100% loan, what the closing costs may be to see if you really can afford to buy a home. What is the worst they can say? No ? then you know for sure you cant get into your own place.
Lana Lavenbarg is a Realtor? with RE/MAX Ideal Brokers, Inc.in Grants Pass, OR.
A: If you can find a property that you like, the seller offers a lease-to-own option, and you can both come to satisfactory agreement in regards to terms/conditions, then it could meet your objectives. Of course, consult a financial adviser in regards to whether it makes financial sense for your specific circumstances. Best of luck.
Alex Cortez is a Realtor? with Wailea Village Properties LLC dba/Island Sotheby?s in Kihei, HI.
A: Contact a couple of mortgage brokers and ask what kind of first time buyer programs are available in your area. Many times there are government subsidized programs that help provide the down payment necessary. Good Luck.
Joan Flood is a Realtor? with Dagmer Chew HomeStead Real Estate Co in Cape May, NJ.
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