Is homeownership on your horizon? Are you excited about your possibilities? Wow... you can finally paint the wall black, green or purple just because you can!!! How cool would that be?
So, you pay $1,000 in rent now. For $1,000* in mortgage payment a month, you could buy a $150,000 home at 7% interest for 30 years. In the Dallas/ Fort Worth market, $150,000 buys you a pretty good starter home.
Hold on..... before you go on further, let's ponder on some important issues of homeownership first.The $1,000 in mortgage payments have not even included the property taxes and insurance. Okay, so let's back up to a little less house then. Let's assume that the property taxes and insurance is approximately $250 per month. That makes the mortgage payment (principle and interest) to about $750. At that amount, you are probably looking at a house valued between $110,000 - $120,000. Still not bad.
So, here you are. You put your signature on the dotted line. Your real estate agent called you to tell you that your loan closed and funded. You received the keys. You now own your American Dream. You move in and you are happy.
New homeowners start to think differently. The mix and match furniture from the college days suddenly do not fit the taste of their new home. They did not like the wallpaper the previous owner left behind. The yard needs to be mowed, edged and trimmed. The garage needs some organization. So, what would a "regular" new homeowner do in this situation? They go out to make Home Depot and Lowes their second home. They could also qualify for a reserved parking spot just because of their frequent visits. These are the unseen foreseen expenses that homeownership incurs. How much is ever enough? So, out they go to get a Home Depot or Lowes store credit. Zero percent interest for 18 months? Sounds like a no-brainer. Have pure intentions of paying this way before the zero percent deal ends? But life got in the way? Before you know it, you are looking at more debt.
Even if you are disciplined enough not to do home improvement projects and do not mind using the couch Aunt Janet gave you, homeownership could have maintenance costs to consider. Remember in your apartment days, when the air conditioning unit is not cooling enough, you pick up the phone to call the apartment manager? Gone are the days. When your heater goes out, you pay for the repair. When your toilet gets clogged, you sign the invoice.
It is not my intentions to dampen your spirits. But if I was your realtor - the one who watch for your best interest, if I did not discuss these scenerios about your possibilities and just share with you about homeownership as a bed of blissful, sweet smelling roses, I feel I did not paint the whole canvas.
A well-prepared new homeowner is a smart planner. Remember that your home should be a blessing for you. It should serve you and your family well for many, many years, not the other way around. So, if you feel that homeownership is on your horizon, pick up the phone and call. I'd love to share tips and strategies with you to make your American Dream a pleasant experience.
House Rule: Is Buying ALWAYS better than RENTING?
The answer: In the long-run, yes. In the short-run, no. It can leave a bad taste in your mouth for a while.
Showing posts with label homeownership. Show all posts
Showing posts with label homeownership. Show all posts
Friday, August 31, 2007
Suprime Mortgage Dampen Your American Dreams?
Has the Subprime Mortgage got you a little down on your American Dream? The dream of owning your own home? What has the media done recently? The stock market is like a roller coaster - One day it is up and another day, the sky seems like it is falling. News splashes everywhere talking about foreclosures at an all time high, more houses on the market now than ever before.....
What is Subprime Mortgage?
A sub-prime lender is one who lends to borrowers who do not qualify for loans from mainstream lenders. Some are independent, but many big-time mortgage companies have set up sub-prime departments to take part in this lucurative market.
What is a Subprime Borrower?
A subprime borrower is one who cannot qualify for prime financing terms but can qualify for subprime financing terms. The primary disqualification for mainstream loans is primarily due to weak credit scores.
What could be the Subprime Lending Terms?
With the higher risks of borrowers defaulting, subprime terms are normally at a higher interest rate, some with early pre-payment penalties, etc.
So, what does this really mean to you - if you have not achieve your American Dream?
The fall of the Subprime Mortgage is a good thing. What???? What do I mean? No doubt, I am in the business of assisting people achieve their American Dream. Let me get this straight - I AM ALL FOR THE AMERICAN DREAM. After all, I came to this country in search of the American Dream. But before I go further, let me describe to you what "my version" of the American Dream is about.
My American Dream goes far beyond owning a piece of real estate. Coming from a third-world country and a minority in my very own country where minorities fight to be the fittest to survive, I call America - the greatest Land of Opportunity. In this place, regardless of my race, color, nationality or sex, if I put my mind into anything I want, the great blue sky is my limit. If I can dream it, I can achieve it!!!
So again, what does this mean to you? The Fall of the Subprime Mortgage? You might have just fall onto the "disqualified" category and did I say it is a good thing? There is always a reason why you were disqualified. It is most likely your weak credit history. Evaluate to see where you stand financially in the past three years. Have you ever been late on payments? Are you close to maximizing the credit cards you have? Do you have debts? Are you not saving money each month?
These are some painful questions to ponder on. If your answer could be Yes to one of these questions, reflect to see if you really are ready for homeownership. Your home should be a blessing to you. It should not be something you work, work and work just to make the payments. Worry one day, if you would be foreclosed on because you barely made the cut into qualifying for the loan.
Build your financial strength prior to achieving the American Dream. That means no debts of any kind and a good stash of savings to sit on (3-6 months of monthly expenses). Then your American Dream is a blessing for you and your family.
With the covers of news media splashing foreclosures every day, how sweet is the American Dream now to those who are going through this stress? I am not looking down on those who are in foreclosures today. There could be many, many unforeseen reasons. But if you could build your foundation on solid rock (no debts and savings), should you give yourself and your family that advantage of building the American Dream?
What is Subprime Mortgage?
A sub-prime lender is one who lends to borrowers who do not qualify for loans from mainstream lenders. Some are independent, but many big-time mortgage companies have set up sub-prime departments to take part in this lucurative market.
What is a Subprime Borrower?
A subprime borrower is one who cannot qualify for prime financing terms but can qualify for subprime financing terms. The primary disqualification for mainstream loans is primarily due to weak credit scores.
What could be the Subprime Lending Terms?
With the higher risks of borrowers defaulting, subprime terms are normally at a higher interest rate, some with early pre-payment penalties, etc.
So, what does this really mean to you - if you have not achieve your American Dream?
The fall of the Subprime Mortgage is a good thing. What???? What do I mean? No doubt, I am in the business of assisting people achieve their American Dream. Let me get this straight - I AM ALL FOR THE AMERICAN DREAM. After all, I came to this country in search of the American Dream. But before I go further, let me describe to you what "my version" of the American Dream is about.
My American Dream goes far beyond owning a piece of real estate. Coming from a third-world country and a minority in my very own country where minorities fight to be the fittest to survive, I call America - the greatest Land of Opportunity. In this place, regardless of my race, color, nationality or sex, if I put my mind into anything I want, the great blue sky is my limit. If I can dream it, I can achieve it!!!
So again, what does this mean to you? The Fall of the Subprime Mortgage? You might have just fall onto the "disqualified" category and did I say it is a good thing? There is always a reason why you were disqualified. It is most likely your weak credit history. Evaluate to see where you stand financially in the past three years. Have you ever been late on payments? Are you close to maximizing the credit cards you have? Do you have debts? Are you not saving money each month?
These are some painful questions to ponder on. If your answer could be Yes to one of these questions, reflect to see if you really are ready for homeownership. Your home should be a blessing to you. It should not be something you work, work and work just to make the payments. Worry one day, if you would be foreclosed on because you barely made the cut into qualifying for the loan.
Build your financial strength prior to achieving the American Dream. That means no debts of any kind and a good stash of savings to sit on (3-6 months of monthly expenses). Then your American Dream is a blessing for you and your family.
With the covers of news media splashing foreclosures every day, how sweet is the American Dream now to those who are going through this stress? I am not looking down on those who are in foreclosures today. There could be many, many unforeseen reasons. But if you could build your foundation on solid rock (no debts and savings), should you give yourself and your family that advantage of building the American Dream?
Wednesday, August 29, 2007
The Power of Focus superceed the Power of Math
Are you getting ready to purchase your first piece of real estate? I remembered what that feels like. It feels both exciting and scary...... Are you not sure you are doing the right thing? Got some debt strap you down for a while?
My advice for saving for homeownership is not typical. I know that. But I do know if you follow these steps, you walk on solid grounds for sure. There is nothing better than knowing every step you take sets up foot firmly in the ground.
My advice: Pay off consumer debts first, then build a good savings prior to buying your first home. Why? Debt can take a toll and joy out of homeownership. Even if you purchase a fairly new home, who is to say that things do not break? Or better yet, what guarantees you to not be in car wreck? I do not claim to be a devil's advocate but for those whom I had advised and worked with several months prior to purchasing the house ends up feeling at peace when they move it.
How Do You Do It?
Lay out all your debts on paper. List from smallest amount to largest (regardless of interest rates or payment size). Stop your 401K/ investments. That frees up additional cash you can now put towards the smallest debt. Attack it first. Then after you pay off that debt, take that amount you were using, attack the next largest debt.
In this exercise, the Power of Focus superceeds the power of math. While most "mathematical intellects" choose to pay off the highest interest rates, you must realize that when dealing with financials, you are dealing with "emotions" more than you are dealing with "mathematics". After all, it was emotions that got you into the debt in the first place. What we try to do here is to generate a huge intensity to eliminate debt.
If you have a huge mountain of debt to pay off, you might loose focus after a while because you feel it is going no where. If you attacked the smallest first, you gather more and more intensity about paying the debts off one-at-a-time (smallest-to-largest).
Try it. You will be glad you did. Good luck!
My advice for saving for homeownership is not typical. I know that. But I do know if you follow these steps, you walk on solid grounds for sure. There is nothing better than knowing every step you take sets up foot firmly in the ground.
My advice: Pay off consumer debts first, then build a good savings prior to buying your first home. Why? Debt can take a toll and joy out of homeownership. Even if you purchase a fairly new home, who is to say that things do not break? Or better yet, what guarantees you to not be in car wreck? I do not claim to be a devil's advocate but for those whom I had advised and worked with several months prior to purchasing the house ends up feeling at peace when they move it.
How Do You Do It?
Lay out all your debts on paper. List from smallest amount to largest (regardless of interest rates or payment size). Stop your 401K/ investments. That frees up additional cash you can now put towards the smallest debt. Attack it first. Then after you pay off that debt, take that amount you were using, attack the next largest debt.
In this exercise, the Power of Focus superceeds the power of math. While most "mathematical intellects" choose to pay off the highest interest rates, you must realize that when dealing with financials, you are dealing with "emotions" more than you are dealing with "mathematics". After all, it was emotions that got you into the debt in the first place. What we try to do here is to generate a huge intensity to eliminate debt.
If you have a huge mountain of debt to pay off, you might loose focus after a while because you feel it is going no where. If you attacked the smallest first, you gather more and more intensity about paying the debts off one-at-a-time (smallest-to-largest).
Try it. You will be glad you did. Good luck!
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