By Jule’ Dunham
Greetings from the World of Real Estate with Julè. Life is Good!
I trust that you are doing well this week. Did you get your air conditioner maintenance scheduled or completed? May I remind you to change your air conditioner filter each and every month making sure to use the filter recommended by the manufacturer for your unit. This simple maintenance task can save you a great deal of money.
Why? Air conditioner filters will help you keep the unit from working harder than it needs to work.
There are many things that can fail on the unit, but changing the filter is a must do. We are just beginning to experience the hot summer that lies ahead.
Along with maintaining your air conditioner, maintain your body. Dehydration can cause serious problems. Stay properly hydrated and pay attention to your body’s signals when outdoors, especially in the direct sunlight. You can “eat your hydration”, such as watermelon and other fruits and vegetables.
Produce really was put on our planet for out physical benefit. Take all necessary precautions to prevent heat stroke or heat exhaustion. After all, we want you around for a long time to come. And of course, I certainly enjoy my decaf green tea-both hot and cold.
When speaking with a young couple recently, they were trying to decide whether to continue renting or purchase a home. There are several questions and other things you should consider when making this decision.
Let me help you with the advantages and disadvantages of “owning vs. renting”. So, here we go, “Which is Best?” What is best for you depends on your circumstances. How long will you stay in the home? Generally speaking, it takes four to seven years to break even on a home. If you are thinking about buying a home and selling it in two years, it is very unlikely that buying will be cheaper than renting.
Do you think of or need your house as an investment in your retirement plan? Americans are accustomed to their homes being a store for wealth they can liquidate in retirement as part of downsizing their lifestyle. In 2015, Gallop reported for the second straight year that more Americans named real estate as the best long-term investment, over stocks, gold, savings accounts/CDs, and bonds.
Real estate leads with 31% of Americans choosing it, followed by stocks/mutual funds, at 25%. Please note that although home prices have recovered from their pre-2006 market slump and continue to rise, the price of your home can still fall.
Are you financially ready? Owning a home is a financial commitment that requires planning how homeownership will fit into where your life is headed. Ask yourself what your budget is and if either buying or renting would require you to stretch your finances.
A frequent mistake of first-time homebuyers is comparing a month’s rent to a month’s mortgage payment.
There are many additional fees necessary to include to make a fair comparison, principal interest, property taxes, property insurance, homeowner’s associations fees, and maintenance. You are legally obligated to “maintain” your property when you make a loan on that property.
Are you prepared for a down payment? This is the lump sum payment that funds your equity in the property (how much of the property you actually own).
Down payments vary; 20% is preferred and gets the best rates.
There are some loans that allow down payments as low as 3%. Sometimes, relatives contribute to the down payment.
If you have an opportunity, take a gift rather than a loan because lenders will add that debt to other monthly obligations and potential mortgage payments to determine your debt-to-income ratio, which generally can’t top 43% to qualify for a home loan.
Can you afford the monthly mortgage and its components? Generally, a mortgage includes loan principal and interest (both amortized over the life of the loan) plus homeowner’s insurance and property taxes (which are pro-rated). These items can affect the monthly loan-only payment by several hundred dollars.
Are you emotionally ready? Can you handle the stress? The Holmes and Tahe Stress Scale, a landmark stress study, ranks many events that go along with buying a home in the top 43 most stressful circumstances in life. Stress overload can lead to missed payments, which can destroy your credit or even make you lose your home. It is better to rent when life is strained, and then buy when your stress levels are lower.
Are you ready for commitment? Are you ready to make lots of decisions, from picking a real estate agent to picking paint colors? Are you confident enough to choose a neighborhood where you believe home values will continue to appreciate in value and that will serve your needs (e.g., proximity to schools, shopping, recreation, etc.)? Are you ready to devote the time and attention to maintain a home (e.g., leaf-raking, grass-cutting, appliance maintenance and repair, etc.? Taking care of your investment can be gratifying, but only if you are prepared.
There is a woman named, Suze Orman, that appears on PBS from time to time. During a particular episode, the topic was homebuying and there was a member of the audience that expressed she did not want to own a home because she did not want to deal with the expense and scheduling of having maintenance performed on the home. Her best option, in that case was to rent and not buy a home and that is perfectly fine. Just remember, you can not sell a property that you do not own.
I will continue to bring you more homebuyer (first-time) information next week.
Remember: Say Hello. Be Kind. Be Friendly. Embrace Life and all that it really offers. Keep Life Simple. Making good relay relationships is very important to our mental, emotional and physical health.
Should you have a topic you would like addressed, please feel free to contact me.
Thank you for reading my column and have a blessed week.
Here is your local realtor, Julè Dunham, signing off until next week.
Crye-Leike Realtors
Julè Dunham, Affiliate Broker, SRES, RENE. Contact her by phone at 901-828-8471 (cell) or 901-840-1181 (office) or by email to: [email protected] for an appointment to speak with you, your group or club.
“Let’s Make This Happen Together”
