Make the Leap from Rent to Mortgage!

Make the Leap from Rent to Mortgage! (chalkboard rent to buy)

If you have been saving for a down payment and dreaming of owning your own home, you may feel like you’re ready to make the leap from rent to mortgage. You’ve been looking at your budget, and your future, and want to build equity in a home of your own. That’s the American dream!

The Columbus Team knows that the leap from rent to mortgage is more than just exchanging one payment for another. We want you to be prepared for both a lender’s evaluation of your financial readiness and the very real expenses of homeownership. That way, you can relax and enjoy the process of choosing and buying the home of your dreams.

Mortgage readiness checklist:

  • Budget for a rent/mortgage payment that is about 25% of your monthly income.
  • A great credit score allows banks to offer you lower interest rates on your mortgage, so it’s important to have the best score possible. Dispute mistakes, make on-time payments, and try to pay down balances until you are using only about 30-35% of your available credit. Don’t cancel your oldest accounts, as that shortens your history.
  • A down payment can affect your bottom line for years. If you put 20% down, you won’t be required to add mortgage insurance to your monthly payments but as little as 5% down is possible for purchase.
  • Debt-to-income ratio is another factor lender’s look at when evaluating your financial health. Paying off a small loan or getting your credit cards down to 30% of the total credit available can make you a more attractive lending risk. Ask your favorite lender what they look for, so you can prepare.
  • Factor taxes into the equation. Mortgage payments consist of payments to principal, interest, taxes, homeowner’s insurance, and other costs. Take a look at your favorite neighborhoods and find out the amount each homeowner pays per $100K of home value.
  • A condo can be the perfect home for many, just remember to add the HOA fee to your monthly expenses.
  • Set aside a certain amount for your home repair fund. You won’t have a landlord to call for fixing a clogged drain, broken appliance, or a leak in the roof.
  • Homeowners also mow their own lawns, shovel their own snow, and more. A small fund to purchase tools and supplies to care for your new home is wise choice!

Should we purchase a new home or an older home?

purchase-new-home-or-older-home

The following is an excerpt from The Locale Real Estate News.

My fiancé and I are searching for our new dream home in a central metropolitan area. Over the past few months we have been struggling with the decision of whether or not we should purchase a new home or an older home. I love the charm of the older homes in the area, but I’m not sure if they hold as much value as a new home would. From your experience, would you say that an older home could be worth as much as a home that was recently built?

Sandy Q.

Dear Sandy,

This is often a question we hear when buyers, like yourself, are interested in centralized properties.

Consider the Variables in a New Home vs and Older Home

When considering the value of a home, and whether or not it is a good idea to purchase an older home over a newly built home, there are many variables. Like you said, older homes offer charm and elegance, and unbeholden to some – many are built with a larger square footage and with higher quality materials than what is being built today. Some would argue that homes aren’t built the way they used to be: brick homes are being replaced with houses wrapped in vinyl, attention to detail is being lost, houses with character are being swapped out for open floor plans in cookie cutter neighborhoods.

Consider Future Expenses

However, people would consider a new home more valuable because there should be no major expenses in the first several years of ownership. In a new house, modern features like media rooms, large closets and extra-large bathrooms are more attainable. In an aged home you rely largely on the previous resident’s tastes and technological whims, unless you already plan to farm thousands into a remodeling.

Consider the Big Ticket Item Expense

All that in mind, however, a house that is 30 years old may be equally renovated and just as updated as a new home. The usual big ticket expenses are windows, roof, siding, and HVAC, so if all of those are well kept, then an older home could be of equal value as a brand new home and of more value if the foundation is stronger.

Consider Land and Location

When thinking about what type of home is right for you, land and location can come in to play. Typically the older homes are likely to be much more centralized with more properties to choose from, while the newer homes in the area are a bit fewer and built farther out from the city center. Many of the older homes in the area are generally larger than the newly built homes and are located on larger pieces of land than what people in the same area would currently be building on.

Additionally, on that land the landscaping is normally already completed and with the possibility that 10’s of thousands of dollars in landscaping could have already been completed and included in the purchase price.

Value is in the Eye of the Beholder

The truth is that value may be in the eye of the beholder. Just look at all of the details and what you are looking for specifically in a home, then relate that to the age of the home, major home expenses, the quality of the construction, the land/ location, and the overall costs to evaluate value.

If you have any additional questions about the values of your home, I am always happy to have a chat free from obligation. Just give us a call at 614-888-6100.

Why List Your Home for the Holidays?

Why List Your Home for the Holidays?

Many people consider taking their homes off the market over the holidays or decide to wait until the New Year to list their home.  Here are 6 reasons that suggest the holidays may be the perfect time to go into contract on your property!

Why list your home for the holidays?

  1. Many of us begin anew in January; new jobs, making dreams come true, fresh resolutions about living well, etc. That can include buying a dream house. Your home needs to be on the market now for the folks that want to move into a new home in the new year.
  2. Because the tax year ends December 31, many buyers will buy now, rather than waiting until January. These are very motivated buyers!
  3. This is the perfect time for sellers! Casual Looky-Loos are home with holiday parties and plans, only serious buyers are looking now.
  4. It’s the perfect conditions for listing. Your home is decorated and inviting, showing it’s best features…and the competition is limited, as other sellers take their homes off the market for a couple of months during the holidays.
  5. Smart sellers know they can list their home now to take advantage of the end of the tax year and serious holiday buyers and still enjoy the holidays in their current home. Sell now, and arrange for closing in the New Year!
  6. Your home looks great for the holidays, smells terrific, too, but you’re worried you should wait for “good weather” to show your home off to it’s best advantage? No worries! Display framed photos of your home in spring and summer in a prominent place, along with other info about the home. Buyers will respond to your smart marketing, and have a great idea of how fabulous your home is in the warmer months!