Benefits of owning your own home - by Carrie Colby

Being a homeowner gives you the security of knowing the roof over your head is yours. You get a feeling of contentment, satisfaction and fulfillment. It’s the wish of most, if not all, of us. Homeownership is the American Dream. 
 

Homeownership is the best investment. The value of your home appreciates, which means that if you decide to sell it, its price will be much higher than what you paid for it. Homes appreciate about 5 percent every year (of course some areas appreciate more than others. As we have seen in our area in the last few years, not all homes appreciate annually, but just like most investments if you hold onto them for the long term they will gain value. Try if you can to wait out the market and only sell when you will make a profit. 

In a way, homeownership is a form of forced savings because you’ll have to allot a certain amount of money for monthly payments or risk losing your home. 

You also need to set aside funds for future repairs or improvements. 

Homeownership gives a sense of permanence where your family can live and grow. 

Emotional security goes with this. It gives your family peace of mind knowing that you have a home to call your own. You will develop lifelong friendships and a sense of roots for you and your family. Your family will develop a sense of community. Homeowners become attached to neighbors, become interested and involved in events and work towards the betterment of the community to protect and preserve property. 

Additionally, owning a home eliminates landlord hassles. You will have no more worries with regard to a lease not being renewed and monthly rent being increased. Owning a home gives you the freedom to redecorate, remodel, make improvements, have pets, change the color or the décor of your home as you desire. You also get privacy unlike a rental in which the landlord has access to the place. 

Keeping up on maintenance is crucial to making sure your home does in fact appreciate. Routine upkeep ensures that your family stays safe while living in your house and it eliminates costly big ticket repairs. For an example, having your septic system pumped every couple of years will help you prevent costly back-ups and extends the life of the system. The same goes for your furnace. 

Painting your house every few years keeps your home from needing costly repairs and prevents leaks around windows and doors. 

Finally, you save on taxes. All the interest and property taxes you pay in a given year can be deducted from your gross income to reduce your taxable income. 

You can borrow against your equity because the value of your home increases against what you owe on it. You may also have a better credit rating. Paying your mortgage on time contributes to an outstanding credit history. 

Owning a home is the biggest and best investment a person can ever make, so you have to manage that investment to the best of your ability. It requires extraordinary commitment of funds, time and attention. 

Carrie Colby is a broker and the owner of Premier Properties located at 1263 Roosevelt Trail in Raymond. She can be reached at columnist@TheWindhamEagle.com.

Thoughts on home buying - By Rick Yost

Most of us will buy at least one home in our lifetime, and there are a few things that you should consider before buying a home. By taking these thoughts into consideration before buying, you will save yourself the trouble of making the mistakes that many other home buyers have made. So do yourself a favor and remember: 
 

 Consider your exit strategy—I know it is usually the last thing you are thinking of when buying a home, but it shouldn’t be. Someday, you or your heirs are going to sell the home. When you do sell it, you are going to want to get the largest return possible. Remember—location, location, location and think about the next owner when doing any renovations.

 Reality TV isn’t real – It is great how people on television go out for a fun little day trip, look at three houses and find the house of their dreams. Sorry, but it doesn’t really work that way. Those shows edit hundreds of hours of footage to show the half hour that you see. Finding the house that you will call home takes time and work. So prepare for the home buying process, make the time and effort commitment necessary to make your search a success.

 Houses are not perfect—always get a housing inspection—all houses have problems. Many buyers are surprised at the length and detail of a general housing inspection. More importantly, they are floored by the problems that show up in them. It is important to remember, inspectors are professional doomsayers. That is why you want, but most problems they find will be inexpensive and easily fixed. Do not walk away from your dream house because of a leaky faucet. Most repairs can be negotiated into the contract. Just be prepared to find out that the perfect house you found isn’t so perfect.

 You are not just buying a house—you are also buying a mortgage. This is probably the most important thing to keep in mind. Shop just as hard for your mortgage as you do for your house. This is not just a minor detail or expense. It is actually in most cases the most significant part of the purchase. Take advantage of low rates. They add buying power to your home search. Low interest rates are much more important than low housing prices. Most people make their buying decision based on what their monthly payment is going to be (can I afford it, or not) If interest rates go up 1 percent, housing prices need to drop 10 percent to keep your monthly mortgage payment the same. 

 Work with a real estate partner, not a real estate salesperson—your real estate agent shouldn’t try to sell you anything. Your agent should try to find the house of your dreams (in your price range, that is) and help you navigate the buying process. Find an agent that you are comfortable with and can communicate clearly with. A good agent will simplify the process and protect your rights from the start of the process until after the purchase. 

 If you keep these thoughts in mind when buying your home, you will be much happier in the long run. Isn’t it much nicer (and cheaper) to learn from the mistakes of others. 

Rick Yost is a real estate partner with Keller Williams Realty and an author of the book “Help! My house is upside down” a book about short sales.

Communication - By Lisa DiBiase, Landing Real Estate

In all aspects of life, business and real estate, communication is one if the single most important components to having success. Specifically working with a realtor, communication begins at the onset of determining what the goals are of the client. Without the correct understanding at this point will determine how successful you are in accomplishing your goals and how easily you will work with your realtor. As realtor's, we know that we don’t just sell houses, we are selling time! Our job is to devote our time to best serve the client. When we communicate, we are selling the fact that we will work harder and that our time will be spent serving the client’s needs better than our competitors ever would!
 

Let's first define communication using Dictionary.com:

1. The act or process of communicating; fact of being communicated.

2. The imparting or interchange of thoughts, opinions, or information by speech, wiring or signs.

How to determine if your realtor has good communication skills:

Does my realtor understand my needs/goals?

Good communication is as much about listening and making yourself available to another person as it is about relaying a message. True salespeople can alter their style of personality and listening skills to accommodate the client. This is called versatility, a key ingredient for every successful realtor. If the realtor is able to adapt to your personality and make you feel heard and understood, you are on the right track.

Does my realtor make me feel comfortable?

The Internet obviously provides a great deal of information at our fingertips. The bigger question is your realtor providing you the guidance and best negotiation skills. As realtors, we have the understanding of the home buying and selling processes. It is our job to make you feel comfortable throughout the entire process from inception to closing. 

It's cliché I know, but real estate is not only about location, location, location! I challenge you to consider its just as important to have communication, communication, communication! 

As I have said since the beginning, please call a local realtor for all your real estate needs no matter how big or small. We are trained professionals here to make your life easier. It's best to surround yourself with the right team of professionals that can continuously give you the right advice for all your circumstances.

Bad credit need not apply...or should you? - By Rick Yost

I am asked everyday about mortgages and the ability to qualify, and there is a strong misconception that you now need 20 percent down and perfect credit to qualify for a mortgage. It is very true that it is not like 2006 when lenders were throwing mortgages at borrowers, but it is not all bad either. Lenders have tightened their standards and we have all heard crazy stories of mortgages applications being denied for what seemed to be little or no reason, but mortgages are available to even those without perfect credit.
 

 A mortgage company’s definition of bad credit may not be the same as yours. A quick review of FICO scores (you did read that column, didn’t you?) tells us that a credit score of 740 to 800 is excellent, 720 to 740 is great, 700 to 720 is good, 680 to 700 is mediocre and 620 to 680 is approvable even if less than perfect. Your credit score just starts the process. It helps determine what types of mortgage you qualify for (conventional, FHA, etc.), and what you will pay for an interest rate. Sorry to say, but the worse your credit score, the higher the interest rate/and or charges.

 After looking at your credit score, the lender will do a full credit review. This is the process where underwriters look at-- What happened? Why did it happen? Will it happen again? Some of the common issues that lenders look at and what they generally mean:

Late mortgage payments—one late payment in the past 12 months is permitted as long as explainable.

Late student loan payments—one late payment in the last 12 months may mean only conventional loans.

Record of late payments—is possible to work with, but expect higher down payment and interest rates.

Short sale—eligible for a conventional loan with at least 20 percent down or a VA loan in 24 months from the sale. Eligible for FHA using 3.5 percent down 36 months from the sale.

Foreclosure—FHA loan with 3.5 percent down is available 36 months from the date of foreclosure, VA loan with no money down is available after 48 months, but conventional loans are not available for seven years.

Bankruptcy (Chapter 7)—FHA loan with 3.5 percent down is available 24 months after the discharge, VA with no money down in 48 months from the discharge, and conventional loans in 48 months from discharge.

 You can get a free credit report once a year from www.annualcreditreport.com to see your credit score and your credit history. This will be important to know when seeking a mortgage. Most lenders have something called investor overlays. These overlays are adjustments in lending guidelines that they get from their investors. Which really means that not all lenders can do the same loan. It is important to know that just because your first lender said no, it doesn’t mean all lenders will say no. In order to avoid spending too much money on mortgage application fees trying to find a lender that will say yes--get your credit history and credit score, be open and honest with potential lenders, and ask them about their programs. 

Remember always pre-qualify for a mortgage before house hunting. Happy house hunting.

Rick is a realtor, real estate author, and long- time Windham resident. You can reach Rick with any of your real estate questions or needs at columnist@thewindhameagle.com.