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Janeese Jackson's Blog

By Janeese Jackson | Broker in Portland, OR

Are You Paying Off Someone Else's Mortgage?


Jah Cure - "What Will it Take?"

What will it take so you will feel comfortable to make a decision to get out of the rent race and become a homeowner?  I would suggest first that you compare your rent with a mortgage payment on a similar size property.  No need to "over-project".  If you don't have the need for a lot of room and you are currently renting an apartment, then compare the cost of your apartment to a similarly sized condo. If you want a larger home than your current one, use the rent that property would require instead of what you're currently paying. If it's considerably cheaper, you may not need any further encouragement.

Of course, by the time you consider the principal reduction, appreciation and tax savings, your monthly cost of housing could be much less than the rent you're paying.  The principal reduction included in each payment is like a forced savings account that increases as your mortgage balance decreases. Your equity in the property will also grow due to appreciation. The equity is part of your net worth and an investment in your future and your family's future.  The income tax savings can be an additional financial consideration if the combined interest and property taxes exceed the allowable standard deduction.

Trends are showing that both tenants and homeowners are staying in their homes longer. It's been said that whether you rent or own, you're paying for the home. Do you really want to buy the home for your landlord?  Talk to a trusted mortgage broker or banker and, then, sit down with a real estate broker and brainstorm your next move.  You could be closer than you think.  Check out your numbers on a Rent vs. Own.

Comments

By Zahra5210,  Sun Feb 10 2013, 22:51
10 Things You Shouldn't do Before Buying a Home
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1. Don’t change your job before applying for a home loan. Along with that, now is not the right time to become self-employed or quit your job. You want to show lenders stability, which means you’ll be less likely to default on the loan.
2. Don’t change banks. Like your employment, you want your banking history to show stability.
3. Don’t buy a car or truck or any other form of transportation that you have to finance. Buying one increases your debt-to-income ratio and that’s something loan officers don’t want to see.
4. Don’t buy furniture on credit before buying your house. Like financing a car, charging big-ticket items increases your debt-to-income ratio and now is not the time.
5. Don’t be late on your credit card payments or charge excessively. You need a track record of responsibility and show that you can manage your money.
6. Don’t make large deposits into your bank accounts. Lenders like the money that will be your down payment to be sitting in your account for at least two months – what they call “seasoning” – so that the funds don’t just appear out of the ether.
7. Don’t lie on your loan application. Sounds simple, right? But don’t leave out any debts or liabilities you have or fudge your income. It’s fraud.
8. Don’t co-sign a loan for anyone. Even if you’re not the one making the payments on that loan, it increases your debt-to-income ratio.
9. Don’t have inquiries made into your credit. Looking for new credit translates into higher risk for lenders. If your inquiries are related to your mortgage search, it usually doesn’t affect your credit score because the assumption is you’re rate shopping. But opening credit accounts within a short period of time represents some risk and your credit could take a hit. It’s probably not a huge factor in your calculating your ability to repay a loan but why take a chance at this juncture?
10. Don’t spend your money for closing costs. Part of the price of financing a loan is the closing costs and you’ll likely have some responsibility for paying them. Make sure you have enough for your share of the obligation.

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