Rent or Buy?

Rent or Buy
Rent or Buy? (from simplifyingthemarket.com)

There are some people who have not purchased a home because they are uncomfortable with taking on the obligation of a mortgage.  You should realize that, unless you are living rent-free (such as in your parents’ basement), you’re paying a mortgage.  Regardless whether you Rent or Buy, you are paying someone’s mortgage – either yours or your landlord’s.

As Entrepreneur Magazine, a premier source for small business, R. L Adams explained in his article, 12 Practical Steps to Getting Rich,”

“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”

Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Management organization at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

Rent or Buy

As a home owner, your mortgage payment is a form of ‘forced savings’ which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person with that equity.

Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were at 3.94% last week.

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.

(from http://www.simplifyingthemarket.com/en/?a=331591-e956e3da05580ddb18884dc0329c1fa6)

Maryland announces mortgage program for active duty and veterans

flagA $20 million initiative was announced to assist veterans and military families to buy a home. The “You’ve Earned It!” program offers low mortgage and significant down payment assistance.

Governor Larry Hogan was quoted in a press release from the Governor’s office, ““I am very proud of this new initiative, which helps our brave men and women in uniform and their families to achieve the American dream of home ownership and establish roots here in Maryland…The program is not only good for our economy, but good for our communities.”

The “You’ve Earned It!” initiative is a program through the Maryland Mortgage Program. The program offers active duty military (including Reserves and National Guard), honorably discharged veterans and honorably discharged disabled veterans a 2.75% fixed-rate, 30-year mortgage and $10,000 in down-payment assistance. The program is available until the $20 million allocation is exhausted – so hurry!

Purchases must be in one of Maryland’s Sustainable Communities. There is at least one designated Sustainable Community in each of Maryland’s 23 counties and Baltimore City. Find a Maryland Sustainable Community: (www.mdhousing.org/website/programs/dn/communities.aspx);or search by property address (www.bit.ly/dhcd_scmap).

What do first time home buyers need to know?

Home buying tips and fundamentals for

first time home buyers

Don’t let your first time home buying experience be overwhelming. Before you plan your Sunday trip to open houses, it’s important to review the fundamentals and make sure you are going into your home purchase fully aware of the responsibility you are about to take on, as well as prepare you for the process and pitfalls that may come your way.

The first item on the list is to determine how much you can afford. Affordability is determined by your financial state and interest rates. Your financial state includes factors such as your income, debt, savings, and expenses. Interest rates impact on your ability to purchase a home because your monthly payment is based on the rate you lock into; the higher the rate, the higher your payment. To determine how much you can afford, you need to contact a mortgage lender for a pre-approval (I am happy to provide you with several names of licensed loan officers).

Once you know how much you can afford, make a housing budget. Making a housing budget can help you understand your expenses, which included utilities, maintenance, and other expenses such as cable and internet. Additionally, take into account any interest rate adjustment (if you have an adjustable rate mortgage) and increasing real estate taxes. Many first time home buyers get into trouble because they underestimate their monthly housing expenses.

Knowing your rights as a home buyer can help you too. Learn about consumer protection laws such as RESPA (Real Estate Settlement Procedures Act), Equal Credit Opportunity Act, Fair Credit Reporting Act, and the Truth in Lending Act. You can get more information about these laws from the Consumer Financial Protection Bureau (consumerfinance.gov).

As a first time home buyer it is important to know that you have the right to choose your service providers (except for certain circumstances), such as real estate agent, lender, title attorney, insurance provider, etc.

Your next step will be to choose a real estate agent. It is recommended to interview several agents before choosing as your agent will be your trusted guide through the home buying process. A good buyer agent is not only a good negotiator, but does their best to protect your interests.

For more information, please contact me or complete the form below:

A word on negotiating your home sale

The “first rule” of negotiation is to not be emotional.  However, many decisions about buying and selling a home are often based on emotion; furthermore, home buyer’s and seller’s expectation and anticipation can also influence decisions.

Stick to the facts.  Armed with data and facts, there is less guessing and you are more likely to be persuasive in your arguments.  Additionally, relying on facts will also help you stay focused on the larger picture of buying or selling your home.  Realistic expectations can be had by comparing recent neighborhood comps to your home rather than relying on what you hear on the news about national stats.  Being factual can also help negotiate home inspection repairs and other items you may need to address in your transaction.

Local Real Estate Expert – Dan is a trusted and respected real estate agent who has been writing about local real estate for the Montgomery County Sentinel since 2005. Dan creates comprehensive pricing analysis and unique marketing plans for home sellers, buyers, and other professionals.