Why Own a Home?

When you own your own home, you are able to build equity and reap certain tax and long-term financial benefits, that aren’t available to renters. Additionally, you become a (more) permanent resident of your chosen community, which is not without its own set of benefits as well. Here are the top three benefits to owning your own home:

  1. Financial benefits. You get tax deductions, you are able to build equity on your home, and you are eligible for loads of other financial benefits. Come tax day, you’ll be glad for mortgage interest payments and property tax obligations because they are (usually) both fully deductable. Additionally, sometimes closing costs, loan application fees, and appraisal fees are deductable as well.
  2. New friends. Housewarming parties, tailgating, cookouts, etc.; neighborhoods are kind of like a small little community within a community. So, when you remove that For Sale sign and move into your new home, you will discover tons of wonderful opportunities to get to you’re your neighbors, your neighbors’ friends and families, local workers, local vendors, and so much more. And hopefully you will develop positive relationships with your neighbors, which will really help turn your house into a home.
  3. Flexibility. Our needs change over time; one year we desperately need a home office, and the next year we need a nursery. Another great thing about owning a home is that you can change and remodel your home to offer whatever fits your needs best! Owning your own home gives you tons of options to change and adapt your space to fit all of your needs, so that you won’t have to worry about moving every time something changes.

Convinced? Click here to find a local real estate agent who can help you buy a home!

Some of the information in this blog was paraphrased from Inman News.

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5 Things to Think About Before You Build a House in Auburn Township

Before you even start building a new home, there is a lot that you need to do. A lot of planning, budgeting, and forethought should go into such a task. Here are 5 tips that will help you stay on track, and on budget, when you are beginning to build a new home in Auburn Township.

1. Your Budget

  • How much can you afford to spend on building a home?
  • Don’t plan to spend so much that you go bankrupt afterward
  • Plan for hidden costs
  • Expect to be paying on a mortgage
  • Talk to someone about a construction loan
  • Plan out how much you will want to spend on the kitchen, the bathrooms, the basement etc.
  • Every square foot, whether it will be used or not, counts in the cost

2. Your Lot

  • Are you going to build in an existing development? A spacious country lot? You can find both in Auburn township, so which will it be?
  • Experts will need to examine the lot before building (they need to check soil conditions, durability of land, drainage patterns, zoning and building codes, underground piping, etc.)
  • Realize that your location may cause you to have to compromise on certain things you may want (there may not be room for an in-ground pool)

3. Your Team

  • Most likely, you will need to hire an architect, a builder and/or a contractor, an excavator, a home designer, and a surveyor.
  • Start by hiring a builder/contractor
  • Let your builder choose or recommend some of the other members of the team
  • Remember, you can hire or fire anyone; it’s your project
  • Anything you want, your builder can find a person to execute; but it won’t be for free. Don’t forget about your budget when you are considering adding an interior designer (not really necessary) to your team

4. Your Plan

  • You can find “stock plans” (a widely used template) for new homes and build based on that.
  • You can also look at current homes in the Auburn township area for ideas
  • You can ask your builder/designer to make minor changes to the “template”
  • You can also design your own home (you will need a licensed architect for this)
  • Choose (or create) a plan that will serve the needs of you and your family for at least the next 5 years
  • Focus on having a good foundation, and a structurally sound home versus the finishes on the wood used
  • Be willing to compromise on some things
  • Mistakes will happen, but choose your battles wisely
  • However, if something really doesn’t look right to you, question it-drastic flaws have to be fixed

5. Your Contract

  • A contract needs to be drawn up and signed between the builder/contractor, designer/ architect, and the home-builder.
  • Make sure you understand and approve of every clause in the contract; you are the one who will be paying for the home and the services rendered
  • The contract should describe the building project in detail
  • Include a comprehensive list of all parts to be incorporated into the house
  • If you or your team makes any changes down the road, make sure the change is reflected in the contract
  • ON YOUR OWN, keep track of additions, changes, and subtractions made to the contract
  • The house must be built in accordance with all codes and regulations-ask for proof of this from your builder

 

For more things to think about before building a home, check out these articles!

http://architecture.about.com/cs/buildyourhouse/bb/beforebuild.htm

http://architecture.about.com/od/buildyourhouse/a/buildyourhome.htm

5 Ways to Cut Mortgage Costs

When you own a home, it becomes your most important and most expensive asset, so it only makes sense that your mortgage payments are pretty costly. The good news is, there are quite a few ways for you to cut your mortgage costs and perhaps even shorten the life of your loan.

The simplest way to cut mortgage costs is to make an extra payment on your mortgage each year. This may sound counterproductive, but in fact, making these extra payments ahead of time helps save you tons of money in interest costs. Extra payments will also help you shorten the life of your loan. Bi-weekly payments will help you to pay more throughout the year. By making a half-payment every 2 weeks (versus a full payment every month) you will make 13 full payments in a year (versus 12).

If you have Private Mortgage Insurance (PMI), drop it. Once your mortgage balance goes below 80% of the home’s value, you can petition to cancel your PMI, which could take hundreds off of your monthly mortgage payment.

If you think your home’s value may have dropped within the last year, have it re-assessed. If the value has gone down, your yearly taxes should go down with it.

Talk to your lender about resetting/ recasting your monthly mortgage payment; he or she will be able to tell you if you are eligible for this. If you are eligible, the life of your loan may be shortened and/or you may be able to make smaller monthly payments.

You can also talk to your lender about refinancing. Refinancing will allow you to have a lower interest rate on your mortgage; this is especially important right now because rates are at historic lows. NOTE: there are fees associated with refinancing, so talk to your lender and/or financial advisor before going ahead with it.

For more tips on saving money on your mortgage, click here.