As the events of the last few years in the real estate industry show, people forget about the tremendous financial responsibility of purchasing a home at their peril. Here are a few tips for dealing
Homeownership Is Easier Than Ever
To many, owning a home means freedom, stability and security and investing.
Freedom, to do what you want, when you want. All you need is time and money to go along with that great imagination of yours.
Stability and security, a chance to settle down and grow with the community.
Investing, not in stocks and bonds, but in accumulating considerable net worth with a monthly mortgage payment instead of a rent payment. This is what turns homeownership into a powerful financial tool. Homeownership is usually an individual's single largest wealth resource when used properly. As you pay money into your house without taking it back out, it grows over time as the property value appreciates. In 30 years, a $100,000 house could double or triple in worth.
For a long time, mortgages existed exclusively to nobility. When the wealth of the world increased after the industrial revolution, banks were willing to open themselves up to “high-risk” borrowers. They began offering mortgage loans to common people. This allowed common people to own a home and become landlords themselves if they wanted to. Take a look at this fun info-graphic on the history of mortgages: Real Estate Through Time
Credit availability increased over the last several months which indicates lenders are more likely to lend to homebuyers. MBA Chief Mike Fratantoni says Fannie Mae and Freddie Mac's move to back 3 percent down payment loan as well as the Federal Housing Administration’s action to reduce its mortgage insurance premium have helped ease credit. Lenders are also showing more willingness to accept slightly lower FICO scores – 620 to 740. An increase in the number of clients securing a loan while making zero to 6 percent down payments has been seen by real estate professionals. Because of the FHA’s reduction in mortgage insurance premiums and GSE-backed 3 percent down payment loans, homebuyers are coming to the table with less money for down payments.
Homeownership may now be open to many people, but it is still important to practice moderation. If you take on more debt than you can handle responsibly, you’ll default on the loan. And the market can fall because of loan defaults.
If you are in the market to buy a home and need to secure a mortgage, I suggest the following:
Research and find a mortgage
Research the basic types of popular mortgages available in the marketplace
Review the costs associated with a mortgage
Review the process that you must go through in order to secure one
Know and understand the pros and cons of homeownership
Know and understand the tips for positioning your finances
Qualify for a favorable interest rate
Next, call me, Sam Lepore. I’d be happy to answer questions you might have about mortgages and can direct you to lenders who are eager to help you secure a mortgage. Call Sam today at (856) 297-6827.
Sam Lepore is a Realtor with Keller Williams in Moorestown, NJ. Call him today at 856.297.6827 ....