mortgage

Great Reasons Buying A Home Is Better Than Renting

November 17, 2021 By Deborah Ward

The common wisdom is that buying a home is better than renting. Common wisdom exists for a reason, buying is better than renting and here’s why.

The first reason is cost

If you rent a home it costs you more in 5 years than buying one does. Here’s how. If you rent a home for $1,500.00 per month for 5 years will cost you $90,000.00. Buying a home with a mortgage payment (principal and interest only) of $1,500.00 is $90,000.00… BUT a homeowner gets a tax deduction for the interest paid on their mortgage. Let’s say that deduction is a total of $3,000.00 or $250.00 a month. Over 5 years that’s $15,000.00. Deduct that from your 5 year amount paid out and you actually only paid $75,000.00! That doesn’t even take into account a First Time Home Buyer tax credit that you may qualify for if you’re a first time owner.

Finite vs infinite

Those monthly payments are finite with a purchased home, but infinite when you rent. Your mortgage has a beginning payment and end payment and once you pay that last payment, you get to live in your home with no monthly payment to stay there (beyond your real estate taxes). When you rent, you pay a monthly payment to live in the home with no end unless you leave. If you rent a home and walk away from it when the lease is over you leave with nothing but the possessions you came with. When you sell a home, you get back the equity, or value, that you put into the home. As you pay your mortgage, you gain equity from the amount of principal paid. You also gain equity when the value of your home rises. For instance, if you purchased your home for $150,000.00 and sell it ten years later for $250,000.00, you gained $100,000.00 in equity.

Repairs and updates

That rise in equity can come from changes in the market, but also in the value of repairs and updates you make to the home. Those repairs and updates can be made when you want and no one else gets a say. If you rent and want to update even the paint in a room, you need the permission of the landlord and if they say no, you’re stuck.

So yes, it pays to buy!

If you are thinking of buying a home in the Tampa Bay area, give The Deb Ward Team a call! 727-410-0336

Who Is Going To Be Buying Your Next Listing?

November 11, 2021 By Deborah Ward

Did you know that knowing who your average prospective buyer is can help you sell your home? Makes sense. If you know that your average person looking at your home is a certain age range, income level, etc., you can target your efforts in marketing your home, and even in choosing a Realtor.

Know your target buyer

Let’s say that you have a condo in a 55+ community. You know that your target buyer is 55 years old or over, and probably has a certain income range. This will tell you to find a Realtor that specializes more in older clientele, who can bring them to you, but who also knows how to market to them.

So who is the average American home buyer? Depends on whether it’s a first or second home. So let’s look at both.

Average home buyer

The average home buyer in the US for a primary home is 33 years old and has an average income of $86,500.00. They mortgage 93% of the sale. If they are second home buyers the average age is 56 years old and has an average income of $112,500.00. They mortgage 83% of their purchase. This is probably because they have more savings, but also because a second home mortgage requires more down money.

So how is this useful? Well, a 33 year old is most likely settled in a career, possibly married and has a family, or is starting one. Your Realtor will know how to market your home to meet their criteria.

If you would like find out more about selling your home in the Tampa Bay area, give Deb Ward, The Irish Realtor a call today! 727-410-0336

Tips For Buying and Selling A Home At The Same Time!

October 27, 2021 By Deborah Ward

You own a home and for whatever reasons; need for more or less space or job transfer or whatever, you decide you need to sell your current home and buy a new one. You’ve been told that buying and selling simultaneously is impossible, but you also know you need to do it.

The good news is that it is possible to buy and sell at the same time, it just takes some juggling and good decision making. Here are some tips to make it work for you.

Your financial situation

First, have a good knowledge of your financial situation. Have your current home appraised not just for value, but for a realistic selling price. Get a payoff balance on your mortgage. The payoff figure isn’t the same as the balance shown on your mortgage statement. The mortgage company will charge certain fees or amounts of interest. Your escrow balance is normally either refunded to you at settlement or after, so it won’t affect your payoff figure.

Knowing these figures will give you your equity in your current home. It won’t be an exact figure but should give you a better idea of what you will bring to the table in a purchase. It will also give you information to tell your new mortgage company about money down possibly getting you a better rate.

Knowing your finances will also tell you if you could afford a month or two of double mortgage payments if the sale and purchase don’t coincide and what updates you can afford on your current home.

Next, as with any sale, pack, declutter and update

Pack up your things, which by default declutters the space, leaving only what you really need to use for the next 30 to 90 days. Repair any issues and paint the space if it needs it to make it look fresher for potential buyers. Make any necessary updates, especially to baths and kitchens.

Money spent wisely now will pay off at sale.

Now start your new home shopping

Whether you have listed your home or not this can give you an idea of what the current market is for both sellers and buyers. If you are moving to another city or state, take a weekend to go and look. It can help you make decisions about updates needed on your current home and give you an idea of what you will need to buy in the new area.

Lastly, rely on your Realtor

If you are staying local, he or she can help you in both transactions. If you are moving out of state he or she can help you find a buyers agent in your new location. One or both can help you make the best decision for your situation.

Buy the House of Your Dreams and Avoid Being “House Poor”

October 27, 2021 By Deborah Ward

Buying the house of your dreams doesn’t necessarily mean you have to be house poor. You’ve heard the term before “house poor,” but do you know that you can avoid being house poor? Here’s how to avoid it.

Be Firm With Price Points

Negotiating to buy a home can become a situation where what you want can overshadow what you can really afford. You fall in love with the house of your dreams and bending on the outer limits of your set budget can easily happen. One way to avoid that is to firmly set those budgetary price points before you start looking. Be firm with your realtor that going above them is not an option. That will keep you from finding that perfect house that is just above your range and you are scrambling to figure out how to make it work.

Know What You Can Spend- Rely On Yourself

Next, don’t rely on a bank or realtor to tell you what you should spend on a home. Remember all those people who did and are now underwater or were foreclosed because they believed lenders or Realtors assurances that their calculations were right, they really could afford it? Don’t become one of them.

Get pre-qualified for a mortgage and then look below that pre-qualification number. Just because you can qualify to get a $300,000 mortgage doesn’t mean you should get a $300,000 home. Figure out the monthly payments on that pre-qualification amount and make sure that it is a number that you can afford… if nothing comes up or goes wrong. Leave yourself enough space in your income to debt so that you can save for those inevitable emergencies.

Do Your Homework

One way to be sure is to do your homework. A good way to estimate what you really can afford is to take your annual household salary and multiply it by 2.5 in order to get a figure for the price you can afford. Then take that amount and figure out what the real estate taxes and homeowners insurance would be and add those amounts to the monthly mortgage amount. Now, does it fit into your budget? If it’s too close to your last penny each month, you need to look for a less expensive home and avoid being “house poor”.