 BENEFITS OF PURCHASING A HOME
The Big Question: Do I RENT or Do I OWN? As a Renter, you write a rent check and pay for someone else’s mortgage and have nothing to show for it. As an Owner, you will love the feeling of owning your own home that fits your personal style to tell the world who you are as well enjoy a few benefits of homeownership:
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Credit Ratings Improve: Owning a home helps you establish financial credibility.
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Independence : Owning your own home provides you with independence and more privacy than renting. You are free to paint walls, plant flowers, keep pets and anything else within legal bounds.
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Investment: As you make more payments and own more of your home, you add to its investment value. Most improvements you make will also add to its value.
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Pride: A home reflects its owner's values and lifestyle. Owning a home can provide you with a source of pride, enjoyment and satisfaction.
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Security: A home can provide security against inflation because the value of your home increases as prices go up and you enjoy the equity.
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Stability: Being established in a community provides a sense of belonging, stability and security.
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Tax Advantages: Interest on your mortgage loan and property taxes are deductible on your yearly personal income tax return. Many of the closing costs associated with purchasing your home are also deductible.
1 st Step - Finding and using a Mortgage broker : Here are two questions that haunt homebuyers: Should I use a Mortgage Broker or go with a Bank? What is the difference?
Choosing a Mortgage Company or a Bank can be quite confusing and stressful. Understanding the difference between your local Bank versus (a) Mortgage Broker(s) could mean the savings of thousands of dollars. Your local Bank has certain guidelines and criteria it must follow. These restrictions often limit the loan products, which are available to you. It is essential to ask your bank which type of credit borrowers they specialize in, also known as Prime and Sub-Prime Borrowers. Knowing this can give you a better understanding of the lending institution you are dealing with.
Mortgage Broker(s) on the other hand are often smaller companies that have an abundance of resources when it comes to getting you the money you need. Mortgage Brokers often are NOT restricted to one lender’s guidelines. It is a well-known fact that the majority of people find better deals with Mortgage Broker(s). Statistics prove that over 65 percent of home loans are originated through Mortgage Broker(s). Using a mortgage broker is a VERY good idea. Therefore, before you go house hunting, get pre-qualified as soon as possible by a professional mortgage broker so you know how much home you can afford.
Down Payment : Coming up with enough money depends on a number of factors, including the cost of the house, credit scores and the type of mortgage you qualify for. 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. Please note, closing costs, which you will pay at settlement, average 3 to 4 percent of the price of your home. These costs cover various fees such as lender, title insurance, taxes, surveys, appraisals, credit reports and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs so you know how much to bring to the closing table.
2 nd Step - Finding and using a real estate Buying Agent : Using a real estate broker is another VERY good idea. All the details involved in home buying can be overwhelming. A good real estate professional can guide you through the entire process and make the experience much easier. A real estate broker will be well-acquainted with all the important things you'll want to know about a neighborhood you may be considering -- the quality of schools, the number of children in the area, the safety of the neighborhood, traffic volume and more. He or she will help you figure the price range you can afford and search the classified ads and multiple listing services for homes you'll want to see. With immediate access to homes as soon as they're put on the market, the broker can save you hours of wasted driving-around time. Please note having a buying agent realtor represent you is critical to the success of your purchase. They are ethically and legally bound to protect your interests and does not cost you a dime because their fees are paid out of the seller's proceeds.
When it is time to make an offer on a home, the real estate broker writes the contract for you and submits it along with your prequalification letter. 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 amount of your earnest money varies but generally will range from $500 to $5,000 dollars.
To Pre-Qualify For a Home Loan or Speak To A Licensed Professional Loan Officer Contact Magic Funding Group so we can help you make the right financial decision that will enhance your financial future.
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