Personal Finance

Advantages of Buying a Home Privacy & Freedom It is a good investment

The value of a home tends to appreciate.

Tax AdvantagesYou can deduct the interest you pay on your

home loan from your income.When you sell your home, most of the profit

is usually tax free.

The Added Costs of Buying a Home The Down Payment

The average cost of a home in the U.S. is around 250,000 dollars.○ Most mortgage lenders require at least a 10 to 30

percent down payment.○ That means saving up to 25,000 to 50,000 dollars!

Monthly costsAll utilitiesMortgage & yearly real estate tax

Decreased mobility

Obtaining Financing When buying a home, most people borrow money in

the form of a mortgage. The home you buy is a collateral, meaning that if you

fail to repay your loan than the bank can repossess it.

Foreclosure is the process that the lender can use to take possession of the house and sell it.

When you are ready to buy, it is a good idea to contact at least mortgage lenders to find the best rate. A good credit score can save you thousands of dollars on

a mortgage. A bad credit score can keep you from getting a mortgage

all together.

Mortgage Rates In general, interest

rates on mortgages are influenced by economic conditions

The amount of your monthly mortgage payment is affected by 4 factors:1. The price of the home2. The amount of the

down payment3. The interest rate of

the loan4. The length of the loan

Two types of Mortgages

Fixed-Rate Mortgage Adjustable Rate Mortgage

A loan whose interest rate does not change.

If the initial rate of the loan is 8.5% then you will pay 8.5% for the life of the loan.

If you plan on staying in one place for more than five years then this is the best option

The interest rate of this loan might increase or decrease over the course of the life of the loan.

Many times it depends on economic conditions.

Most ARMs will have really low initial rates but increase as the length of the loan increases.

If you do not plan on staying in your home for an extended time period than this might be the best option.

Tips for Buying a Home Location:

Housing prices are more stable in safe neighborhoods.

Negotiate before accepting an offer.

Schedule an inspection.

Have a lawyer review your papers.