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Vital Information For
First-Time Buyers
The first-time homebuyer Federal tax credit for $8000, record-low interest rates, and nationwide median home prices dropping to the lowest point in five years, makes this an enticing time to consider buying a home. By the way, that tax incentive isn't truly just for first-time buyers -- it's defined as those not having owned a home in the last three years. Research and knowing your options are critical. Check with your tax accountant for more details. It’s increasingly likely that Congress will extend and expand the popular home buyer tax credit, which will expire at the end of this month.
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According to an article in August in the Raleigh News & Observer, 10.8 percent of buyers are motivated to buy due to Federal and state tax incentives. So far only 1.14 million buyers have filed
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Relieving the Stress of Packing
Packing can be stressful time for every member of the family. To ensure that your move goes as smoothly as possible, try the following tips!
Pack a "Red Box"
Since one in five American families moves every year, that means 22 million families may be searching for their TV remote controls!
One of the pitfalls of packing for a move is you can't always anticipate what you'll need when you arrive at your new home, and movers typically list only the obvious such as dishes, glasses, bedding, etc. The miscellaneous items you need in the first few hours invariably wind up on the bottom of a random box.
To start, you may want to create your own "red box" as some moving companies ("Removers") do in Great Britain. This is the last box loaded and the first one off the truck. The one universal item in the red box is the tea kettle (perhaps this would be the coffee maker in the U.S.). This is also the place
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Making Your Home Age Appropriate Creates Appeal
All of us have something in common with our homes. Sure, style, design, and location are at the top of the list, but how about age? As we age, buyers, especially the baby boomer generation, are looking to transform their homes into a place that they can stay in for as long as possible or they're hoping to find one that's already equipped for them to age-in-place.
So how old your home and you are, are reason to give some thought to if your home needs age-appropriate adaptation in order for you to be most comfortable. And, in doing so, you may actually make your home more valuable to a wider audience of buyers, should you ever sell it.
According to the National Homebuilders Association, making a home suitable for the golden years is economicaly sound. The baby boomer generation (77 million people) makes up 28 percent of the U.S. population. Assisted living for this generation can cost more than $60-thousand per year, not counting moving expenses.
That's pretty pricey. So, if you've taken some steps to make your home an age-in-place sanctuary, then make sure you highlight those renovations if you ever
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Buying vs Renting
With all the foreclosures and bankruptcies taking place, is it cheaper for us to rent rather than buy? Thanks, Sam and Bobbi
When it comes to the decision of renting vs. buying, most people make the decision based upon a comparison of monthly payments. If their rent payment is less than the payment on a home, many decide that it's cheaper to rent than to buy. This approach, however, fails to take into account a number of other factors that influence the total costs of homeownership, rather than just the monthly payments.
The first step for any person who is considering buying (or selling) a home is to talk to a tax professional and then of course call me (wink). Each person's tax situation is different. When you purchase a primary residence you can normally reduce your withholding taxes -- that is because the interest on your mortgage is tax deductible.
One of the most compelling reasons to buy rather than to rent is to lock in a permanent monthly payment at today's rates for the next 30 years. If possible, obtain a fixed-rate mortgage for 30 years. This means that your mortgage 20 years from now will be at the same rate as it is today. In contrast, rent payments tend to keep pace with inflation.
The current 10-year average inflation rate is 2.82 percent per year (http://www.usinflationcalculator.com/inflation/current-inflation-rates/). The average since 1913 is actually 3.41 percent a year. Assuming the inflation rate continues to average 2.82 percent per year, in 2019 your $1,000 mortgage payment would be the equivalent of $718 in today's dollars. If your property value keeps pace with inflation, it would have increased in value by approximately 28 percent as well, making it worth $128,000. Furthermore, you would have paid down your loan for 10 years.
Assuming a 6 percent interest rate on a 30-year fully amortized fixed-rate loan, your balance on your original $100,000 loan would be $83,686. Consequently, your equity position after 10 years would be $16,314 ($100,000 minus $83,686) plus $28,000 in appreciation due to inflation, for a total of $44,314. (This calculation does not take into consideration any amount that you would have placed on the property as a downpayment.)
Of course, there are other costs of homeownership to consider, too, such as homeowners association dues, property taxes and utility bills.
Compare the above example to the costs of renting. If your rent payments kept pace with inflation of 2.82 percent per year, your rental costs over the same period would increase 28.2 percent ($1,282 per month vs. $1,000 today.)
Assuming a 2.82 percent inflation rate over the next 20 years, this example becomes even more compelling. Your monthly loan payment of $1,000 would be the same as $436 in today's dollars. If your property value kept pace with inflation, it would now be worth approximately $156,000.
After 20 years, the balance on your $100,000 fixed-rate loan would be $54,359. Thus, your equity position would be $56,000 due to the inflation-related appreciation increase plus $45,641 in principal reduction, for a total equity position of $101,641.
In terms of rent 20 years from now, if it kept pace with inflation you would be paying $1,564 per month. That's an extra $6,768 per year more than your mortgage payments if you had locked in your 30-year fixed-rate loan at time of purchase.
This may be the best reason to purchase real estate. If you hold your property for the long term, it will normally keep pace with inflation, creating additional wealth. When you rent, you pay off your landlord's mortgage and make him or her wealthy. These are among the many reasons that homeownership remains a great idea.
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Daily News and Advice
Read about the events shaping the Real Estate market today, find current interest rates, or browse the extensive library of advice and how-to articles written by some of the top experts in Real Estate. Updated each weekday.
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