August 28, 2014

Healthy Habits for Homeownership




As a potential homeowner, what do you think a healthy habit for homeownership would be? If you are looking at this picture above then you may have already guessed it: SAVINGS!!! As a potential homeowner (or even current homeowner), savings is a healthy habit for homeownership. 

As discovered in my article, "Millenials and Real Estate" I briefly mentioned the numbers or resources to become a homeowner. Most millenials or people in general don't know how much they need to prepare to be a homeowner. My first initial thought would be to SAVE. We've all heard of that word. It may be hard to do because we think of all the debt that we have. I can't save because of this, that, and the other. Let's rephrase that and think of why you SHOULD be saving. You may want to purchase a home soon, you need emergency funds, you may need/want to purchase a car soon. Saving is a big key to life and now is the time to start saving. I have two ways to save for a big purchase such as a home.

The first start to saving is the 10% rule. This 10% rule is to save 10% of your net income each paycheck. Let's do the math scenario here. Let's say you just signed a new lease but you know this will be the last year that you rent. That means you have a year to save. In this scenario, you have a $45,000 salary and after taxes your salary is $38,250. You will then have a net income of $3187. In simplest terms, you should save at least $318 a month. In a year's time you would have $3,825 saved towards the purchase of a new home. For a $100,000 house, a down payment could be as small as $3,500. You have easily saved your down payment.

The second option could be to save your mortgage payment. For instance we could say that your rent is $900 but you could afford a $1200 in a mortgage payment. You set aside the extra $300 a month in the difference. The difference in savings is $3,600 and you have saved yourself a down payment and have gotten used to paying $1200 in a mortgage in the process.

Some people believe that just because you have purchased a home that the need to save is now out the window. WRONG. Remember as a homeowner, you are now in charge of maintaining your home therefore you should continue to save. By developing a savings habit now, you will continue to have that habit when you are a homeowner. It is important to develop the habit of savings as you may the leap into homeownership.

Did you know there are other savings with homeownership? 

As a homeowner, you get extra benefits that help you in your savings venture and it is called EQUITY!!!! By purchasing a home, you are creating a nest egg Let's display the difference of savings while renting and saving while buying?




There are numerous benefits to homeownership that you may be missing out. Wouldn't you like to see that you are saving money as you maintain your home as well? Imagine how much you could save in five years if you had a forced savings in a mortgage and the savings you commit to in your bank account. Contact me today and together, let's figure out your savings options with homeownership!









Andrea Fowler Web Developer

August 18, 2014

Millennials and Real Estate







Millennials or Generation Y (born between 1981-1996) are prime first time buyers who should take the step into home ownership. As a fellow millenial, I understand the fear of home ownership. We are all "waiting" for major life cycles (marriage or family) before we purchase our first home. The issue with that is we don't determine when certain major life cycles will occur.

Why wouldn't you move into the path of home ownership and increase your wealth today?  

Here are some top reasons why millenials should be encouraged to purchase their first home:

1. Increase in Rent (Are you tired of this yet?)

Each year that you live in an apartment, you are likely to see an increase in rent. That once affordable apartment that seemed convenient is now taking a stabbing on your paycheck. Purchasing your own home is a great investment that provides specific financial advantages, including equity buildup, value appreciation potential, and tax benefits. In some areas, it is cheaper to buy than rent. If you are paying at least $1000 in rent, you should be buying. That is $12,000 to your landlord with $0 to you. Owning a home is a "forced savings plan" that you cannot get from renting! So, can you really afford to keep renting?

2. Low Interest Rates (Really low...you can't beat these rates)

Rates are still at a historic low. Rates are averaging below 4.5%. This is one step to make buying a home affordable. There is no guarantee that rates will stay this low but I would recommend that you start now before waiting for those major life cycles to come into play.

3. Down Payment Assistance Programs

How much do you need? Do you need 20% for a down payment? How many millenials could really afford 20% for a down payment on their own? That number isn't likely to be high. In most cases, the minimum amount for a down payment ranges between 3.5% to 5% depending on the loan structure that you choose. In addition to that, you could qualify for a down payment assistance program. Here in Texas, there are tons of programs being offered that people do not know exist. Assistance can range from a dollar or percentage amount based on income and household sizes. The assistance funds can be used as down payment and/or closing costs assistance. Most major cities in Texas have these programs. If the city that you choose to live in does not have a program, the state of Texas has two programs to assist you called Home Sweet Home and My First Texas Home. If you are teacher, fire fighter, or police officer, there are additional programs for you as well. Is the deal getting sweeter now?

Now that I've given you some basics on why you should become a homeowner, what's stopping you?

Common Reasons that I have Heard

1. Andrea, I don't make enough nor do I have enough money saved. 
Answer: There are numerous of programs available for those within a certain income bracket. You may not be able to afford your dream home but in order to get your dream home, you have to buy a home. Now if you have a startup on the rise or an heir of a booming business then yes you may get your dream home the first time. You can skip this first reason and move on to the others but if you aren't one of those lucky few, a starter home is a great option. Don't be afraid to put a little sweat equity into your home. Did you see what I said there, "into your home?"

2. Andrea, I want to purchase my first home with my spouse for our kids. 
Answer: Oh, are you engaged? When's the wedding? Oh not yet...not sure when that may happen? Single people are purchasing homes everyday. In fact twenty-one percent of single women purchase a home on their own while nineteen percent of single men did the same. If you happen to get married after you purchase your first home, you can make it your martial home, after you've gained enough equity to purchase your dream home you can sell it for a new martial/dream home, or help provide a home to someone else by renting it.

3. Andrea, I don't know where I want to settle myself at. 
Answer: Have you been an area for at least 5 years? You've basically claimed your stake at that location. If you don't know which city of a region that you would want to stay then I would encourage you to visit the different cities in your area that interest you. You should spend weekends there and ask your local Realtor about the area and home prices.

4. My credit is jacked up. Those credit cards in college ruined my life. 
Answer: Hey, we've all made mistakes. I personally believe that financial capability skills should be taught in junior high, high school, and college. It definitely needs to be an elective. I'm sure plenty of us have signed up for easy electives in college for GPA boosters. Oh, I am the only one? I know I can't be. There's help for that too. There are nonprofit (remember I said nonprofit) agencies whose focus are credit and/or housing counseling for consumers. STAY AWAY FROM CREDIT REPAIR COMPANIES. I repeat, "STAY AWAY FROM CREDIT REPAIR COMPANIES." There isn't anything that someone else could do better than you to get your credit together. However, I do have a secret. The secret to rebuilding your credit is: PATIENCE. You didn't get into the credit challenge issues overnight and you sure won't get out of them overnight.

Now I ask again, what's stopping you? Don't let fear or being unaware of your resources stop you from being a homeowner. Contact me. I would love to do a one-on-one consultation with you to provide you resources for your particular situation.









Andrea Fowler Web Developer