Wednesday, February 26, 2014

Renting Vs. Buying

Homeownership is still the American dream, the reality of owning a home is still within the reach of almost 70%, the highest figure ever. Still many Americans don’t think they can or will ever be able to purchase a home. I am here to tell you that is just not the case. With some education under your belt and the right tools anyone can purchase a home if they want it enough to follow the steps and take the time to set a plan in motion. YOU can do this! One of the most common questions I get asked by renters and the first time homebuyer, should I rent or buy? I put together some Pros and Cons for Renting Vs. Buying.

·         Normally is less expensive in terms of Rent and Deposits initially.
·         More flexibility – you can move in a short period of time i.e. 30 day notice
·         Free of Maintenance costs, you can just call when something breaks and someone else will fixed it.
·         No financial obligation for taxes, insurance, flood insurance

·         When you write that check for rent its GONE, money down the drain you can never get it back.
·         NO control over the rising cost of rent.
·         You can’t be creative and make it your own, paint, remodel etc.  
·         You are at the mercy of your landlord when it comes to renewing your lease, if they will even allow you to renew.
·         Restrictions like NO pets, No BBQ’s RULES, RULES and more RULES


·         Buying a home is an investment and should appreciate over time. This should be considered a long term investment.
·         You can lower your income tax liability both federal and most states, by deducting mortgage interest paid each year. You can also deduct your property taxes. This will save you money each year.
·         Your credit rating will go up and banks will be more likely to lend you money
·         You are free to do most any decorative thing you want to your home, make it your own, and let your style shine through.
·         Long term security, you won’t have anyone telling you when to move. You can laid down roots and raise your family, stay as long as you want.
·         Providing you have a fixed rate mortgage your payment each month will be the same for the complete term of the loan, in most cases 30 years. This is a BIG plus!
·         You can finally have that big dog you have always wanted without having to ask permission or pay an extra deposit.
·         You can also plant a garden or trees and make the yard or your dreams.
There are many freedoms when you own your own home, too many to list. But for most it's a sense of pride and security for your family. Priceless!

·         Well the cost of course, money-money-money! Down payment, closing costs etc., etc.
·         Taxes, Insurance, Maintenance
·         BIG dreamer, little budget, most first time homebuyers probably can’t start off with their dream home but instead start out small and move up to a bigger and nicer home at some point in the future.
·         Commitment, you will probably not be able to pick up and move at a moment’s notice.
·         The housing market and economy will determined your gain, it’s not always going to be a windfall. You could get stuck buying your way out of a home.
·         Worst case scenario is short sale and foreclosure if you are not able to make your financial obligations

I hope this list of PROS and CONS helps you with your decision to buy vs. rent. I am a true believer that the dream of homeownership is alive and well. I see it all the time in those who dare to dream and set their sights on homeownership. If you too would like to jump in the ring and learn more about how you can become a homeowner there are many programs designed around the first time homebuyer. Most counties in the US have programs to help you, including down payment assistance.

I offer FREE Mortgage Coaching and will be doing classes both online webinars for those in other states and LIVE seminars in my local area during the month of March and April. I welcome you to contact me directly for more information.

Thank you and I encourage you to ask questions and leave comments.

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926

Monday, February 10, 2014

What is a Mortgage Credit Certificate?

This program was authorized by Congress in 1984 and is designed to help the first time home buyer or anyone that hasn't owned a home in three years. But what is a mortgage credit certificate?  The Mortgage Credit Certificate or MCC will offset a portion of their mortgage interest over the term of the loan as a way to help home buyers qualify for the loan. It is a tax credit and not a tax deduction.  So it reduces the amount of federal income tax you would have to pay and thus increases your income and enables you to qualify…. Pretty cool right?

Here’s some requirements;
1.    Buyers must not have owned a home in the previous three years.
2.    Buyers must meet income and purchase price restrictions.
3.    Buyers must intend to use the new home as a primary residence.
4.    The federal government considers the MCC tax credit to be a subsidy so you may be subject to federal recapture tax IF you sell your home within the first 9 years, you sell at a gain or your income increases above the allowable limits.

Yes there are some income limitations, but they seem to be pretty high so I don’t think that will be an obstacle for most, you’ll have to check your county to see what they are in your area. Plus there are purchase price limitations but overall this is a fantastic program for the first time home buyer.

For more information on what is a mortgage credit certificate and how it can help you qualify for a home loan contact your local state or county housing department or a qualified mortgage professional in your area or by all means please call me. 

IRS link for even more info;

Roxy Redenbaugh
ACMC Loan Consultant
Certified Mortgage Coach
Branch Manager
NMLS #269926