Buy a house now! Keep renting - Wait out the market!
How many times have you read a similar article about the pros and cons of buying a home versus renting. Of course, there are many points on each side of the debate that are very valid. Each point must also be evaluated by the audience on the merits to their own particular circumstances.
The attached document shows graphically where the numbers fall. It is based on the following variables: FHA 30 year fixed rate purchase loan, credit score of 640 minimum, normal property taxes and homeowners' insurance, property appreciation & rent increases of 2% per year. Most people stay in their homes 5 years but the longer term benefits after 12 years are also illustrated.
Even though the monthly payment of $919 is more than the expense of renting at $800, the amount of monthly expense is lower when buying when factoring in the tax deductibility of mortgage interest, mortgage insurance, and real estate taxes. Further, since the principal amount of your payment is actually going toward your equity, the net amount of your monthly housing expense is even less.
The home price used in the example of $125,000 would actually rent in a range of $1000 to $1200 per month. See? You can buy more house than you are renting now and do it for less money!
Most home prices in Oklahoma have remained very stable throughout the burst of the bubble in most of the rest of the country. There are some bargains out there and you should engage a REALTOR® to help you find those bargains.
But before seeking help finding a home, you need to find out how much you can afford. This leads to the best bargain in housing today. Rates continue to be at historic lows, and I will write in an upcoming post about the potential cost of waiting out the real estate market for the lowest home price possible.
Every person's situation is unique. As much as we would like things to be cut-and-dried, I can't recommend anything to any prospective buyer without first having some conversation about your needs, your goals and your circumstances.
Call today to get your self on the Path2Buy your new home.
Tim Epps
Sr. Loan Officer
Fairway Independent Mortgage Corp
918-528-4010
tim@myfairway.net
(In mortgage lending and finance, a haircut refers to a discount taken from the par value of assets being used as collateral. For this story, its traditional meaning is used.)
Last August, the young lady cutting my hair and I were talking about weather, sports, life, etc. She told me she had moved here from Iowa to go to school. She and her parents missed each other and (unlike this clip) yada, yada, yada, wanted to be able to see more of each other. I told her that if they wanted to buy a home here, that I could refer a couple of REALTORS® who could help them find a home when the time was right.
Her mother called me the next day and we talked about how to get approved for a mortgage for a second home. Over the next 6 months and through difficult weather, they made various trips to Tulsa to see homes (and their daughter) with Cindy Roberts of Chinowth & Cohen Realtors.
Right to Privacy laws and my responsibilty to my clients prevent me from more detail, so... yada, yada, yada... They closed today on a home here in Tulsa!
The moral of the story is you never know who will be put in front of you and what there needs are unless you are available and open. Your next opportunity may come from anywhere, even a haircut.
If you are thinking about buying a home in the Tulsa area (or anywhere in Oklahoma), call me. I can help with long and/or short range planning on how you can get the best loan for a home here.
Tim Epps
Sr. Loan Officer
Fairway Independent Mortgage Corp
918-528-4010
tim@myfairway.net
It is NCAA Tournament time. Sixty-eight teams are rewarded for a season of hard work and planning with a chance to win the men's basketball national championship. These teams could not be where they are without executing the plan developed by their coach.
Why should a home buyer expect to go it alone? Many people start to research buying a home by going online to search for homes. They have no idea what they can afford or how their credit stands. Without a good coach and team around them, they have no idea if the information they are hearing in the media is correct or even applies to them or our market in Oklahoma.
With all of the game plans possible to attach a home search, how do you know which strategy will ensure your success and possibly shorten your path to the championship?
As the Certified Path2Buy for the Tulsa area, my job is to help you understand what it takes to be approved for a mortgage and prepare for home ownership. I analyze your income, credit, job security and other factors to get you into the home you are looking for. I give you the information to dis-spell the myths and clarify the media reports about the mortgage market. This is done without cost or obligation to you.
Every serious player starts the season with a game plan to win a championship. They don't start by saying, "I'll shoot better this year" or "I know I don't rebound well, but I'll work on it later in the season."
Why would you say, "Someday, I will buy a house" or "Once my credit gets better..." or "Once I save some money for a down payment"?
It's okay to want to own a home. It's not okay not to have a plan to get you there.
Consider this my request for an interview to get the job as your Path2Buy head coach.
Tim Epps
Sr. Loan Officer
Fairway Independent Mortgage Corp
918-528-4010
tim@myfairway.net
I am turning over the content of my next few posts to answering your questions.
What do you want to know about mortgages? This is your chance to get answers in plain English.
Do you want to know about:
- Qualification
- Rates
- Loan types & terms
- Rent vs Buy
- How to select a mortgage professional/REALTOR, etc.
- Should I refinance
I will provide straight-forward answers to your pressing mortgage questions. Send an e-mail to tim@myfairway.net or call me with your question. Your contact information and any personal identifying information will be kept confidential.
Tim Epps
918-528-4010
tim@myfairway.net
When you ask a mortgage professional what his rate is, you must first know if you are rate shopping or evaluating a professional. Borrowers shopping for the lowest rate are almost always guaranteed to pay more for their loan - either in rate, fees, or both. Borrowers who are evaluating what mortgage professional they want to work with are much more likely to get the best loan available for their needs and circumstances. That is, if they understand how to make their evaluation.A lender who blindly quotes a rate, who responds immediately to your rate question with "4.75%" or "I can get you 4.x", is being dishonest at worst & disingenuous at best. Mortgage rates are not like produce prices, posted in the grocery store for all to see and available to all buyers. Many factors go into getting the best mortgage for you.Some factors are based on your circumstances:- Your credit score
- Your down payment (or loan-to-value for refinances)
- The amount of your loan
- Are you ready to lock your rate now?
- How long before you need to close?
- Are you a teacher, veteran, policeman, fireman, first time home buyer, etc?
Other factors are based on your needs:- How long do you plan on living in this home?
- Do you plan on refinancing in the future?
- Do you prefer a lower payment or lower costs?
- What is your tolerance for risk?
Only an open, honest conversation with a mortgage professional will illustrate how each of these factors influence the mortgage rate that is available on the best loan for you.If you are in the market for a home now and would like to discuss your situation or if you have a home and would like to see if you can save by taking advantage of rates near historic lows, contact me. There is no obligation. You owe it to yourself to see what a proper mortgage interview can do for you.Tim Epps918-528-4010 tim@myfairway.net
