June Is Home Ownership Month! Live the American Dream
Owning a home is the American Dream. Equity in a home is the biggest investment most American homeowners will ever hold. This month we celebrate those who have made the decision to do whatever it takes to own a home. Its a time where we discuss why home ownership matters. With interest rates as low as 4%, now is a great time to make this investment for your family and your future.
To purchase a home, whether it be your first home or your third home, it starts with breaking down the numbers and the details of what you are looking to buy. Your Real Estate Broker can help you find a place that fits with your family and the type of neighborhoods you are considering. If schools are a factor, your Broker can help to educate you so you find an area that fits your needs. Since where you buy is a determining factor in what you get, your Broker can show you what homes are available within your budget and help educate you on what that budget will get you in different areas of the city.
Nearly all mortgage loans and lenders require some about of cash as a down payment. The amount you've set aside for this will determine the kind of mortgage you quality for. It will also impact how much you can afford to borrow for a home. Your real estate broker can work with you and the lender to help you make the right decisions in your home purchase. Many sellers are looking for a pre-approval letter from potential buyers before they take a transaction seriously. If you have an idea of wanting to purchase a home now or in the future, its always a good idea to reach out to a broker to help you get started understanding the numbers. Your broker can help connect you to a lender, who will collect your tax returns for the prior year, a record of any assets, recurring debts, and your credit score to come up with a qualified pre-approval. Many banks will require that your monthly costs can't exceed a percentage of your income. For example, if the bank doesn't want for you to exceed 25% of your monthly income, if you bring in $65000.00 annually, your total monthly housing costs should not exceed $1,354.00 (25% of your monthly income) Just knowing this number can help you start to plan and save up for a downpayment for the house of your dreams and get you focused. Another thing to note, When you get a mortgage, typically they can lock into it for years, even decades. This means that what you pay will remain steady, rather than increasing year over year like rent costs.When you are ready to put in an offer, your broker can help to negotiate terms on your behalf to the seller to get you the deal.
One thing to know, though you are not required to put a 20% down payment on a loan, not doing so may result in you having to pay a type of mortgage insurance to cover the lender. The insurance would go away as soon as 20% of the loan is paid off. Both the lender and your Broker can help make this transaction easy for you. Another thing to note, all mortgage lenders are not created equal. Let your Broker send you some education on the lenders they prefer to use in the area near you. A Broker is there to help offer education for every step of the home buying experience so you can make the best decisions for yourself and your family.
Here in Chicago we have some very interesting property taxes. Let your broker help you break down the numbers, but over the last few years taxes rose an additional 10% depending where you are located in the city. Each area in the city is taxed differently, so work with your Broker to help you plan for those additional expenses.
Overall, if you plan right and create a team to help you save, the work put in is well worth it. We aren't here trying to convince you either way, but when owning a home is part of your dream, it's good to know there is always a path to do so. This month, we celebrate those who achieved their American dream. If you are curious if buying a home is for you, reach out to a broker to help you answer those questions. They are always happy to help!