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For Buyers:
Various Reasons to Buy a Home
- Bigger Paycheck- Interest on your home mortgage is tax
deductible, therefore you may adjust your withholding allowances in
anticipation of the tax break. This translates into a larger "take-home-pay"
weekly. Check with your accountant to see what this tax deduction can mean to
you.
- Credit-Buying a home is a significant step in
solidifying a good credit report. Buying a home shows the willingness to pay
bills (mortgage) and stability over a term. Both of these turn into positive
points on your credit report.
- Independence- Owning a home offers far more privacy than
renting and it allows you to change your environment as you see fit. You can
paint walls any color, have pets, plant flowers, and make your house a
home!
- Investment- You are investing in a durable good. As you
make your payments, you are investing in a "personal savings account". Should
you decide to move, your savings account pays you back with interest per
inflation.
- Satisfaction- Owning a home can provide it's owner with
a great sense of pride and enjoyment. A home illustrates it's owners values,
thoughts, and lifestyle through freedom in architecture, landscaping,
décor and more.
- Stability- Mortgage Payments even on adjustable rate
mortgages are far more predictable than rent rates. They also allow you to live
in one location without annual negotiation.
- Tax Advantages- There are a myriad of unique tax
advantages that accompany home ownership. Not only is interest on your mortgage
tax deductible, but closing costs, and property taxes are as well.
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Things to Look at While Viewing a Home
As you walk through your perspective new home there are so many
things to focus your attention on, how can you get it all in? Try to look at
each of the following things each time you do a walk through, take notes and
pictures for later conversations and decision making.
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Bathrooms
- Sinks
- Showers/Tubs
- Toilets
- Vent Fans
- Heating Fan
Appliances
- Dishwasher
- Freezer
- Garbage Disposal
- Ice Maker
- Laundry Connections
- Microwave
- Oven
- Stove
- Refrigerator
- Trash Compacter
General
- Attic Fans
- Air Conditioning System (costs)
- Electrical Outlets Integrity
- Ceiling Fans
- Central Vacuum System
- Door Bells
- Doors
- Fireplace Damper
- Garage Door (manual/automatic)
- Heating System (costs)
- Hot Water Heater (size)
- Light Fixtures Interior & Exterior (style &
integrity)
- Windows (wood or metal & if insulated glass may be
fogged or cracked)
- Water Purifier
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Kitchen
- Cabinet Doors (style & integrity)
- Cabinet Drawers (style & integrity)
- Sinks (condition)
Exterior
- Ensure no Brick is Bulging or Cracking
- Ensure Concrete Driveway Walkway is not cracking
- Ensure no Broken or Missing Shingles/Roofing
- Ensure no Siding is Rotting or Missing
- Rain Gutters Damaged? (clean?)
Interior
- Cracked Walls or Ceiling
- Cracked Tiles
- Loose Plaster
- Pipe Insulation Missing
- "Soft Springy" Floors
- Sub flooring loose or damaged?
- Water Stains Under Bathrooms
- Water Stains on Ceiling Under Attic
- Water Stains near Windows
Basement
- Cracks in foundation walls
- Cracks in foundation floor
- Poor Ventilation
- Water Seepage
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8 Types of Loans You Should Know About
Here are 8 different ways you could borrow the money for the home
of your dreams.
Conventional Mortgage - Fixed rate loan from a commercial
lender for a term of 15, 20 or 30 years. Payments, interest rates, and term are
locked at initiation of contract. Requires PMI (Private Mortgage Insurance)
with less than 20% down.
Adjustable Rate Mortgage(ARM) - These mortgages are similar
in term to the conventional mortgages. These mortgages adjust up or down on
each anniversary. After the initial term the interest rate fluctuates
periodically according to financial markets. There are usually caps on the
interest rates built into the contract. Adjustments are on the unpaid principal
balance.
Federal Housing Authority Loan- The Federal Housing
Authority (FHA) insures loans for lenders. This allows lenders to justify
offering larger loans with smaller down payments. Maximum loan amounts vary per
Colorado County.
Veteran Affairs Loans- The Department of Veterans Affairs
provides guaranteed loans for qualified veterans and servicemen. These loans
allow the qualifier to offer little or no down payment for the loan. These
loans are subject to the VA mortgage fee depending on the size of the down
payment. The VA mortgage funding fee is usually equal to 2% of the loan amount
(1st time use). The VA funding fee may be waived for disabled veterans.
Assumable Mortgage- Simply take over the existing mortgage.
The most common assumable mortgages are FHA, VA, or ARM mortgages. You take the
current contract, with specified payments, interest rates, and term remaining.
The equity difference is made up in the down payment. Assumable mortgages must
be either qualifying or non-qualifying mortgages.
Buy Down-Mortgage - Involves paying up-front the interest
over a specific period of time, thereby having a lower payment during the
specified term of the buy down.
Hybrid Loan- 30 year loan that is identical to an ARM loan
except that the interest rate is changed once over the term. The first step is
usually 1, 5, 7, or 10 years of the term.
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