Home ownership means you no longer pay monthly rent for the roof over your head. When you leave, you can sell it to recoup the purchase price and earn any profit that you may have accumulated through your appreciation in value.
But don’t kid yourself. Home ownership comes with a slew of disadvantages, responsibilities, and downright headaches. So before going any further, consider whether your lifestyle and finances make home buying a smart move for you.
Except in a roaring real estate market, it usually doesn’t make sense to buy a home you’ll stay for less than three or four years, because the cost of the process of buying and selling your property means that you could lose money from your equity. On the other hand, you will not pay capital gain taxes if you’re in the property for at least of 2 years.
One key question is whether it costs more, on average, to rent or own in your area. The rule of thumb is that if you pay 33% in rent than you would for owning including the monthly mortgage, property taxes, and any homeowner’s fees, then it’s smarter to own a home then renting it.
As always, get your finances in order before committing to buy a home, and stay informed of all the options, alternatives and programs that will fit your needs.
Get help, and call a Realtor…Call me 714-963-7462. Leading your way home!
Fannie Mae is set to raise the benchmark interest rate for its Standard Modification program. Fannie Mae will raise its required interest rate for standard modifications from 4.375% to 4.5%. The rate was lowered from 4.5% to 4.375% on Sept. 15, but will now rise again in one week. Fannie Mae announced the change on Tuesday in an email sent to its servicers.
When the program began in Jan. 2012, Fannie’s benchmark interest rate was 4.625%. Fannie lowered the interest rate to 4.25% in Sept. 2012, before dropping it to 4% on Dec. 1, 2012.
“Fannie Mae Standard Modification interest rate is not determined on a preset schedule,” Fannie said in the note to its servicers. “The interest rate is subject to periodic adjustments based on an evaluation of prevailing market conditions.”
Fannie also noted that any loan modification requests that were approved at the previous rate are not eligible to be resubmitted for approval under the new modification rule
If you have higher mortgage payments, now is the time to change it! In recent years we have seen many changes in our national economy. We have seen cuts in interest rates given by the Federal Reserve cuts not seen for many years.
One situation that influenced home foreclosures for many homeowners were the high interest rates they were granted. These mortgage loans were presented for a large number of months as a fixed payments and later converted into variable rates, causing a drastic financial instability in many homeowners facing now a new higher mortgage payment.
The HARP Refinance Program gives the Homeowners that have not been behind in the last 12 months, and can prove income under the new conditions and repayment capacity; the opportunity to refinance with low current interest rates. This means that you can refinance even if the actual mortgage balance is higher than the value of your property on the market today. The HARP and FHA programs are the only programs that allow you to refinance under these terms.
Compare and discuss your options and determine if refinancing NOW is financially right for you. The essence of refinancing is to find the best fit and financial balance for you and your family. Remember, an informed decision is the best guarantee!