Posts Tagged ‘home ownership’

To Buy or Not to Buy…

May 20, 2014

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I recently spoke with a client who wants to make a move into a new area for a specific school district for the next couple of years until her children finish high school.  Even with only a potential of living in the home for 2 or 3 years, she felt compelled to BUY a home, primarily for tax deduction purposes.  Her comment reminded me of advice a financial advisor gave me, “Don’t let the tax tail wag the dog.”

Don’t get me wrong, tax deductions are important.  I LIKE tax deductions.  But a much more critical consideration when pondering a home purchase is this, “How long do I plan to stay in my new home?

You should carefully think through your dreams and future plans before buying a home.  If the time frame is only 2 or 3 years, does it make sense to buy a home now?

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Remember, buying a home costs money (attorney fees, appraisal fees, transfer taxes, mortgage fees, etc.).  Does it make sense to incur these costs if you are not certain about the living situation after two or three years?  Would you break even when you look to sell the home in 2 or 3 years?  There are times where renting may make more sense than buying.

What about your situation?  Is it the best move for you to buy now or to rent for a while – to get more comfortable with the area where you think you want to live now?

Before you call the Realtor and go looking for a house to buy, stop and think….“How long do I plan to be in this home?”  Part of making that decision is running the numbers, and that is where I, as a mortgage lender, come into play.  Contact me and we can start the process.

I believe in home ownership. It is the American Dream and I enjoy helping people finance their own American Dream.  But I will always work with you to make sure that a home purchase is the right decision for you – right now.  If you are buying in the state of Georgia, contact me today to get started.  I can work out the financing for you in the most cost-effective way possible.  We at Dunwoody Mortgage Services focus on delivering outstanding customer service while financing your home in a manner that best meets your financial needs.

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“Should I buy?”

October 11, 2011

I get that question a lot these days. “Should I buy a home?” It is a valid question to ask. Some may be concerned about the stability of their jobs. Others may be concerned about whether or not we’ve hit “the bottom” in regards to housing prices. I do understand the reasoning behind those concerns, but let’s look at it from another angle.

The chart above shows the correlation between purchasing power and home values. Currently, we are siting in one of the best periods for buying a home – low interest rates (purchasing power) with lower home values. This combination is very tempting, but still some are holding back. Why? It seems people feel rates are going to stay low forever. That isn’t the case. Interest rates are like stocks… sometimes they go up/down in price for unexpected reasons. For instance…

This time last year, interest rates were at the same point they are now. In the high 3’s. Then around the start of November, interest rates began to climb. Before the end of December (about a 6 week period), interest rates went from the high 3’s to the mid 5’s. It was an unexpected jump and put some people’s home buying/refinancing plans on hold.

What kind of a difference does that jump in rates make? If you qualified for a principal and interest payment of $1,000 each month, then you’d be able to purchase a home up to $250,000 with a 20% down payment while rates remain at their current levels. With rates in the mid 5’s, that same monthly payment of up to $1,000 would cause the purchase price to decrease to $220,000. That is a loss of $30,000 of purchasing power.

In short, the question you should be asking yourself is not “should I buy?,” but “what am I waiting on?” If you plan to remain in the area you are currently residing for the next few years, this is one of the best times ever to buy a home due to the combination of low rates and lower home values. If you are looking to purchase a home in the state of Georgia, I’d be glad to help you get started!