BENEFITS OF HOME OWNERSHIP
There are a variety of benefits of owning a home. Whether you are a first time buyer, upgrading or building a new home you will find home ownership both satisfying and rewarding.
1. Equity Build-up - The single most important benefit of homeownership. Home ownership increases your net worth. The longer you own your home the more your equity increases. Inflation can also play a valuable part in increasing the amount of equity you have in your home.
2. Freedom - Unlike renting when you own your home you can paint or decorate anyway you want or even move a wall without getting permission.
3. Environment - You choose the neighborhood that compliments your personality and offers services that you or your family requires.
4. Keep up with inflation - Your home can appreciate to keep in pace with inflation. Historically, real estate usually appreciates faster than the rate of inflation.
5. Investment - Many home improvements that you make builds equity in your home. Usually you can receive not only the cost of the improvements but the appreciated value of those improvements if you decide to sell your home.
6. Tax Benefits - All interest that is paid on your mortgage is tax deductible. Most mortgages are amoritized which means in the early years you pay mostly tax deductible interest. Your property taxes are also deductible.
7. Trade Value - Most first time home owners use the equity from their existing home to either build their dream home or to make a down payment on another existing home of their dreams.
8. Retirement Security - Many homeowners eventually pay off their mortgage and are able to live "rent free" during their retirement, paying only property taxes and insurance.
9. Borrowing Tool - The equity that you build up in your home can be used as collateral should you need a loan for any purpose in the future. Loans such as college tuition, debt consolidation, vacation, remodeling or whatever your heart desires.
STEPS TO BUYING A HOME
Buying a home is a major undertaking. For most first time buyers it can be the single most expensive purchase of their lives. Your real estate agent and financial institution can help make this an easy process.
1. Pre-qualifying for financing - Knowing your ability to finance can save the heartache you may suffer if you fall in love with a home that you cannot afford. On the other hand purchasing a home you can afford can be your stepping stone to getting the home of your dreams.
2. Pre-approval - Your home lender can pre-approve the amount of loan you qualify for and provide you with a letter of commitment which can prove to be an invaluable tool when negotiation the purchase price of your home.
3. Realtor interview - A real estate agent can be invaluable in helping you find the right home that meets your specifications and price range.
4. Shopping for your home - Finding the home that is right for you and your family requires patience. Real estate agents are knowledgeable about the homes in the markets and have access to Multiple Listing Service which publish properties available in your market. It is important that you check out the school system, taxes, cost of utilities and the type of community services provided by the township your home is located in.
5. Purchase offer - Your real estate agent will assist in preparing the offer and present it to the seller. He/She will also explain the importance of an earnest money deposit. At this point the seller will either accept, reject or make a counter offer.
6. Contract signing - When both buyer and seller have agreed on the sale price, the sales contract must be signed. Your contract should include (a) purchase price (b) mortgage contingency's (c) type of title conveyed (d) date of possession (e) list of personal property included in sale (f) any inspection contingency's such as building, well and pest.
7. Loan approval - If you have not been pre-approved you will have a required amount of time as determined by the sales contract to shop for a home mortgage. Your real estate agent is knowledgeable of lenders in the market and can be very helpful to you at this point of the sale. There are many types of mortgages available. Your lender can explain them to you and help you select the one that fits your budget and lifestyle.
8. Closing - Your closing agent will prepare the necessary documents required for closing such as title examination, payoff statements and deed. On the closing day you will sign all documents. The seller will be paid and you will receive the keys to your new home.
WORKING WITH A REAL ESTATE AGENT
Working with a real estate agent that represents your interests can save you both time and money. Real Estate Agencies are required to provide a disclosure form to you stating what their relationship with you is, whether that of Sellers Agency, Buyers Agency or Dual Agency.
Sellers Agent: A sellers agent can assist the buyer but does not represent the buyer. The sellers agents must represent the interest of the seller.
Buyers Agent: A buyers agent can assist the seller but represents the buyer. The Buyer can obtain a variety of information that may assist negotiations from the buyers agent that sellers agent could not provide.
Dual Agent: Under this relationship both buyer and seller can be represented by the same real estate agency as long as it is disclosed and agreed to by both buyer and seller. Under this agreement neither real estate agent may disclose confidential information that would affect negotiations.