Buy Now Or Wait

hands calculating home mortgage concept photo

You Can Always Find Books That Discuss, “BUY OR RENT, HOW TO SAVE FOR A 20% DOWN PAYMENT”.

This is an excellent short website drill from MGIC Mortgage Insurance Company.

Check it out at MGIC.com whether for you, a friend, your children, or your clients who are afraid to make a decision.

This Site was Recommended to Me By Jeff Lazerson

He is a Columnist at the National Award Winning Real Estate Section of the Orange County Register.

You also may know him as jlazerson@mortgagegrader.com or on twitter: @mortgagegrader_

Want to know what mortgage grader means? Ask him.

He will tell you it is another tool that he has to help borrowers make decisions.

Conclusion:

The short answer to the question is that you do not need 20% down to buy a home. You can get 3 percent on a conventional loan and 3.5 on a FHA loa.

With Government Agencies, you can buy with 0% down, but of course with restrictions and standards to meet. You will be paying Mortgage Insurance, but this is factored into your decision.

This site lets you put in your own personal information and assumptions about what you want and need.

Then, it will give you the costs of buying now or waiting.

Many of the sample calculations show that waiting costs more, as you lose the possible growth in price for the period before you would have bought.

Try it by checking prices from five years ago and comparing to current prices.

Let Me Say It Again, You Miss the Appreciation

If you think home prices will continue to grow, buy now.

If you think that home prices cannot go any higher, check out prices in Santa Clara or San Mateo County.

Why do prices in California, keep rising higher?

I have one question to those of you concerned about how high CA prices is: have you ever lived in snow?

You are paying for the great weather, and that means increasing house prices.

How many retired people do you know have a high percentage of their asset list as the equity in their home?

What Happens If Everything Goes to Hell?

Two items: The loan when you purchase a resident is non-recourse, which means that the lender can only take back the house, no judgment against you in any way.

If everything goes to hell, would you rather have had 3% in the home or 20%? Putting less into a down payment gives you or your spouse a reserve for any setbacks.

Buy a house, get your TERM insurance policy, and hope your equity grows like it has for most people who have held on.

One Point for First-Time Buyers

Do not expect to get the perfect first house. It is a first house.

When you get some equity, you buy THE house. Keep your ego low and your overhead low.

What About Benefits of Tax Deductions from Owning Property?

Another item mentioned in Jeff’s column is that the calculation does not take into consideration the possible benefits of tax deductions from owning.

Be sure to ask your tax person about this.

In many cases, this brings your home payment even lower than your current rent.

Check Out the Column Regularly

BTW, you might make it a habit to check his Sunday column weekly, and while you are there, check the column by Leslie Eskildsen, weekly real estate columnist, Award Winning Realtor at Realty One, and neighbor.

This past Sunday, it was easy for me with my hard copy edition as they were both on the same page.

Last Point Before I Forget;

Get a loan approval and qualification before you get started so you know the range in which you can start looking.

It is tough to look at $800K and find out you can only borrow enough for $600K.

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