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BENEFITS OF OWNING YOUR OWN HOME

The security of owning the roof over your head, the feeling of contentment, satisfaction, fulfillment, it is the wish of most, if not all, Americans, it is what they call the classic American dream, it is called Homeownership.

Owning a home is the biggest and best investment a person can ever make and so he has to manage that investment to the best of his ability. It requires extraordinary commitment not only of funds, but time and attention as well.

There are disadvantages that come with owning a home like maintenance, financial matters, risk of losing equity and the risk of foreclosure.But above all these, there are also a lot of benefits that comes with owning your own home.

-It is the best investment.The value of your home appreciates which means that if you decide to sell it, its price will be much higher than your purchase price. Homes appreciate about 5% every year.

-It is a form of forced savings because you'll have to allot a certain amount of money for monthly payments or risk losing your home. You also need to set aside money for future repairs or improvements.
-It can help you plan for the future with regards to your finances because mortgage rates are fixed unlike yearly increase in rent.

-It gives a sense of permanence where your family can live and grow.Emotional security goes with this.

-It gives you and your family security and piece of mind knowing that you have a home to call your own.

-It develops lifelong friendships.

-it develops the sense of roots of your family especially the children.Your family becomes a part of a community
-It increases self-esteem knowing that you possess something of value.

-It eliminates landlord hassles.You will have no more worries with regard to lease not being renewed and increase in rent.

-It gives you the freedom to redecorate, remodel, make improvements, have pets, change the color or the décor of your home to your own taste and as you desire.

-It gives privacy. Not unlike renters wherein landlords can have access to the place.

-It gives more space - like larger rooms, laundry area, storage area.

-It develops a sense of community.Homeowners become attached to neighbors, become interested and involved in events and work towards the betterment of the community to protect and preserve property.

-you save on taxes.All of the interest and property taxes you pay in a given year can be deducted from your gross income to reduce your taxable income.

-you can borrow against your equity because the value of your home increases against what you owe on it.

-you may have a better credit rating.Mortgage payments paid on time contributes to an outstanding credit history.

IMPORTANT THINGS TO AVOID BEFORE BUYING A HOME

HOME BUYING BLUNDERS - How do you avoid them?

Looking for a home to buy is a very exciting experience.Your emotion balanced with logic is the wisest thing to do. Educating yourself about this long and stressful process of home buying will result in the biggest investment that you will be making in your life.Wrong decisions may lead to an irreversible and costly mistake.

So, what should you avoid so as not to make this mistake?

-AVOID USING YOUR HEART OVER YOUR HEAD. You might fall in love with a home instantly forgetting that you are making a huge financial investment and that someday you might want to sell it, only to find out, when it is too late that your home is tough to resell.

-AVOID VIEWING HOMES ALONE. Bring your spouse, your children or a friend with you.You might miss out on some imperfections because of your excitement.Their point of view will surely be of great help.

-AVOID LOOKING AT HOMES YOU CANNOT AFFORD. Buying a home does not only mean a down payment and fixed monthly mortagages.There will also be expenses for repairs, maintenance, new appliances and furniture, property taxes, insurance.A clear understanding of your finances prevents wasted time.

-AVOID VIEWING HOMES WITH NO CHECKLIST ON HAND. You should have a list of everything you need and what you would like to have according to your priorities.

-AVOID PURCHASING A HOME IN AN UNFAMILIAR NEIGHBORHOOD. Spend some time in the area, ask questions regarding criminal activities, accessibility to schools, supermarkets, or churches.It is not only a home you are purchasing but the location as well.

-AVOID PURCHASING A HOME ON YOUR FIRST VISIT. Do not rush.Visit the home that you like twice, thrice or even more than that.Make sure that this is the home that you really want to settle in.Have a professional home inspection done to eliminate future headaches like the exterior components which includes roofing, gutters, downspouts and the interior systems which includes electrical, plumbing, flooring.

-AVOID LETTING THE SELLER OR THE AGENT KNOW THAT YOU ARE IN LOVE WITH THE HOME. Because in doing so, they could ask for a higher price.

-AVOID GETTING TOO PERSONAL WITH THE SELLER. Be friendly, but treat the transaction as professionally as possible.Remarks about changes and future repairs might not be taken well by the seller.

-AVOID MAKING MAJOR PURCHASES. A new car, jewelries, expensive appliances can wait until after you have purchased and settled in your new home.Because if you do so before the home purchase it will increase your "debt-to-income ratio" and it will affect the amount of loan you qualify for, be difficult to get your loan approved because a huge debt may hamper your ability to pay mortgage, or worst, your loan may be denied.

-AVOID CHANGING JOBS unless you are going to earn more or if the line of work is within the same field.Constant job changes may be an issue in qualifying for a loan.A stable job history is a plus.If you really want a new job, wait until after the home is yours.

-AVOID SWITCHING BANKS. Problems in the verification process may occur when you move your money to another bank.

-AVOID GIVING EARNEST MONEY DEPOSIT DIRECTLY TO THE SELLER. An attorney can hold the deposit or it can be placed in a trust account until closing day.Your contract should state what will happen to the deposit in case the transaction does not push through.

-AVOID VERBAL AGREEMENTS. Put everything in black and white.Whatever was agreed upon verbally does not count in the eyes of the law.

-AVOID SIGNING DOCUMENTS WITHOUT FIRST READING THEM.Read, familiarize, understand, then sign.


By Joe Lane

(By Brandon Cornett)

If you’re planning to buy a home in the near future, you should know your FICO credit score. In fact, your credit score is one of the three most important factors considered by mortgage lenders (along with your debt and income levels). If your score is high, you’ll have a much better chance of getting approved for a loan. You’ll also qualify for a better interest rate, which could save you thousands of dollars over the life of the loan.

It’s important to check your FICO score early on in the home-buying process, because it takes time to improve a low score. While you’re entitled to a free credit report per year, you’ll have to pay a small fee for the credit score. They are two different things. You can purchase your score from MyFICO.com — this is the company that actually designed the FICO scoring model.

But what if you check your score and find out that it’s low? You could qualify for certain types of loans with a score in 600 range, but you’ll be much better off in the mid- to upper-700 range. The question now becomes: How do I Improve my score? And that brings us to the purpose of this article.

5 Good Sources of Credit Information

Here are five websites worth visiting, if you want to learn more about your credit reports and scores:

1. www.myfico.com — We touched on this website earlier. This site is owned by the Fair Isaac Corporation, the company that created the credit-scoring model used by most lenders. They have plenty of educational articles, as well as a forum where you can post questions. It’s well worth a visit.
2. www.homebuyinginstitute.com/credit.php — On this page, you’ll find a collection of more than 100 articles relating to consumer credit. This collection was compiled over a two-year period, as readers sent in their questions. If you have a question about credit reports and scores, you’ll find the answer on this site.
3. www.annualcreditreport.com — This website is jointly owned by the three credit-reporting companies (TransUnion, Equifax and Experian). This is where you should go to request your free reports. This is the only site that is regulated by the Federal Trade Commission.
4. www.ftc.gov/freereports — Why do so many people offer “free” credit reports, and then try to charge you for stuff? It’s a marketing strategy referred to as bundling, and you can learn the truth about it on this website.
5. www.bankrate.com — This site is a treasure trove of helpful advice. In addition to credit tips, it explains the mortgage process in great detail. Start with a keyword search, or click on the “news and advice” link.

by Brandon Cornett

Go online and start researching the topic of credit scores, and you will quickly be overwhelmed with information and analysis. But in truth, there are only a few important concepts that you, as a first-time home buyer, should know about credit scores.

Here are five of the most important things to keep in mind when you start shopping for a mortgage loan — an even long before that.

1. Mortgage lenders will check your score.

When you apply for a home loan, you can be certain that the mortgage lender will review your credit score — among other financial factors. It’s not the only thing that will determine their decision, but it is one of the top factors of the mortgage-approval process.

If your score is low, you won’t even get your foot in the door. You will be rejected right from the start, or you’ll have a much harder time finding a willing lender. If your score is high, you will have more options and better interest rates available to you.

2. Your score partly determines the interest rate.

The interest rate is one of the components that will make up your monthly mortgage payment. Obviously, the principal amount you borrow is the largest factor that determines your monthly payment. But the interest rate plays a major role as well.

If you have a high credit score, you are more likely to get a low rate on your home loan. This in turn will reduce the amount you have to pay each month toward the mortgage. On the contrary, a bad score generally means a higher interest rate — and therefore a higher monthly payment as well. How much higher, you ask? That’s our next point.

3. A good score can save you thousands of dollars.

The difference between a good and bad credit score can greatly affect the interest rate you receive from the lender. It could be the difference, for example, between a rate of 5.5% and 7.2%. These may seem like small numbers on the surface, but when you apply them to something as large as a mortgage loan, we are talking about thousands of dollars over the life of the loan.

4. Your score comes from your own actions.

Credit scores are not arbitrarily assigned to consumers. Your score comes from the information contained within your credit reports. You have three of these reports by the way — one for each of the consumer credit-reporting bureaus.

So where does the information within your credit reports come from? It comes from your own personal actions, your financial history, and your previous use of credit. In other words, it’s a snapshot of how well (or how poorly) you have managed your credit in the past. Good behavior creates a good score, and bad behavior has the reverse effect. It doesn’t come out of thin air — it comes from your own actions.

5. There are no mysteries to improving a credit score.

There are a lot of companies out there who would like you to think that it takes some kind of special knowledge to improve a credit score. These companies make money from people who don’t realize they can handle it for themselves. So let’s set the record straight right here and now. You are the only person who can improve your credit score, and you can do it without paying any other company for assistance.

Pay all of your bills on time, maintain low balances on your credit card accounts, and use credit sparingly. These three things alone can help you earn and sustain a good score for years to come. And there’s no certainly mystery in that!

© 2009, Cornett Communications.