What is a mortgage? Is it just a piece of paper, something the bank graciously gives you so that you can guy a house or condo or other property?
And those banks! Such nice corporations. They want to help you become a property owner.
So, if you qualify, they agree to loan you money. They charge interest for the loan.
And they make a lot of money over the length of the loan.
A lot.
But here is the meaning of the word mortgage:
Mort = death.
Gage = pledge.
So a mortgage is a death pledge. Yikes!
Kind of scary, huh? But please don’t misunderstand; I like corporations and I like banks.
So if a property that you personally own is what you desire–I mean, need–then the best tool to help you become a property owner may be a mortgage.
What could possibly go wrong in your new home? Well, for starters, lots of things!
Your home has mechanical parts that can break like dishwashers or garbage disposals or furnaces. It has a roof that can leak. It has windows that can become loose or break. There are hinges that can fail.
Grubs or moles could move into the neighborhood. I mean, into your lawn. Maybe that will bother you. Maybe not. If it does, that means more work and $$ for you to shell out.
And so this is one more reason we prefer the life of renting: If something Continue reading What Does It Really Cost to Own A Home? →
Buy a home, make a mortgage payment. Piece of cake, right? Not so fast there.
First you may have a down payment. Closing costs. Title fees. And an assortment of other little expenses that all add up when you are closing on your home.
Then when you “own” your home (really, you don’t own it until it is paid for–the bank owns it until then) you will discover a few more expenses.
Oops, excuse me, please. Did I say “a few?”
Well, here’s a few for starters:
Are you trying to decide whether it will be better to buy or to rent your first home?
Here are some things to think about:
What if you buy but,
1. Don’t like your neighbors? They could be loud, crude, rude and up all hours.
2. Your neighbor’s dog barks all hours of the day and night. And he stopped cleaning up the doo-doo and it stinks.
3. You discover that loud, dusty trucks drive past your home all morning.
4. You were so excited about the house that you didn’t notice all of the expressway noise just a few blocks away or the airport.
5. A rock band moves in next door.
6. Taxes. Home owners insurance. Heat Continue reading Should You Buy A Home Or Rent Your First Home? →
Should you buy a home or rent one? It depends on your long term needs.
What exactly ARE your long term needs?
Your long term needs can change over time. Renting a home gives you much more Continue reading Should You Rent or Buy–What Are Your Long Term Needs? →
Real estate ownership can be a very good investment IF certain conditions occur.
1. If you make more money from owning the real estate than you pay for it.
Can Your House Make You Money?
2. If it earns you income over and above your costs.
3. If you earn more money from your property than your expenses.
Hmmm. They kind of all sound alike, don’t they?
If your goal is to use real estate as an investment you must be able to get income from it. Otherwise, it may be an asset on your balance sheet but it will be offset on the debit side by your mortgage.
We all learned that real estate is not a solid buy and hold investment anymore. We went through a glorious period where you could buy a home and sell it–sometimes in just a few years–for a great profit.
But that was then.
Now you have a much better chance of gaining a profit from Continue reading Is Real Estate A Good Investment? →
Why are these happy people smiling? It’s because they are renting their home!
They get to come home and relax after work. They get to visit with friends. They can take weekends away and enjoy shopping or mini-vacations. They can go to the beach or ice skating or visit with family and play with their children.
But they do NOT have to maintain a house that they purchased.
They are assured of shelter but it doesn’t suck up all of their time as a purchased home does.
This couple doesn’t have to wash exterior windows unless they want to.
They don’t have to mow lawns and pull weeds, fertilize or water.
They don’t have to get quotes on replacing the roof or sidewalks or gutters or furnace or hot water heater.
They get to enjoy their time off to do what they WANT rather than what they HAVE to.
If they decide they want to move to another state, they can. There is no big bad mortgage keeping them stuck where they are. They don’t have to wait for buyers to take their home off their hands.
These people are smiling because they are free. They are renters!
The major differences between buying and renting a home are these:
Renters are not responsible for maintenance (except sometimes for lawn cutting.) If the dishwasher breaks or the garbage disposal fizzles out the landlord, superintendent or maintenance crew will fix it or arrange to have it fixed.
You don’t have to.
A house that you buy comes with a mortgage and maintenance duties and chores. You pay all of the utilities. And depending on what type of home you buy you might also have Homeowners Association fees.
If you buy you will have to pay taxes, also. Lately in some areas the taxes have gone down but that’s not the standard. Usually real estate taxes tend to go up each year.
When you rent, the taxes are included in the rent. If there are Homeowners Association fees (HOA) they are already included in the rent, too. Some utilities may be included.
But here are 5 of the biggest differences:
1. You don’t have to come up with 20% down to rent.
2. You are free to move as desired; you aren’t locked into the commitment of buying.
3. Someone else is Continue reading What’s the Difference Between Renting a House or Buying? →
