Why You Should Rent And Pay My Mortgage

Now more than ever is the best time to Purchase a home in U.S. history!

You may ask why, think I am crazy or just writing this post due to the fact my job revolves around assisting individuals in the process of purchasing their home.

As a homeowner you will reap many emotional, financial and economic rewards.
A few of the reward consist of the following:

Buying a home vs. renting is a big decision that takes careful consideration. For many years, purchasing real estate was considered an extremely profitable investment. Over the past view years many have held off, due to the Housing bubble burst and the declining market values due to the historic credit crisis.

Purchasing a home has many befits beyond the financial aspect; when you own your own home Mr. Landlord or apt management cannot stop you from  painting your bathroom canary yellow, or owning a cat and a dog.  These are just a few of the freedoms homeowners enjoy.  Yes, there are certain responsibilities associated with owning a home. Landlords will often argue the benefits of renting, and for obvious reason. If you are renting, you’re helping them make their mortgage payment.

The numbers are staggering if you look at it this way. If you are paying $1,100 per month for an apartment, and you know your rent will increase 3% every year, then over the next five years you will pay your landlord $72,901. This does not included deposits and misc rental fees.  Either way, you gain no equity by shelling out this monthly housing expense and you certainly won’t benefit when the property value goes up!

However, if you were to purchase your own home or condominium, you would be well on your way toward building equity within that same five-year period. By choosing a fixed-rate loan program, you can have the comfort of knowing that your monthly mortgage payment will never go up.

In addition to building equity, there are tax advantages that come into play with home ownership. Depending on your tax bracket, owning a home is often less expensive than renting after taxes. Interest payments on a mortgage below $1 million are tax-deductible.  For example if you purchased a $214,000 home at 5.5% your Net after Tax payment (25% Tax Bracket) would total $916 (see Rent vs. Own PDF).  Within 10 years your home equity with a conservative 2% appreciation together with principle pay down would total $91,629 (see Rent vs. Own PDF).

With the FED currently doing everything in their power to induce Economic stimulus with reduced rates will inevitably lead to massive inflation.  Inflation will increase prices across the board.  Real Estate can be an effective hedge against inflation.  While your rent increases, if you have fixed rate you will have the safety and comfort knowing you can manage your monthly housing expense.

Currently there are multiple tools available to Homebuyers from the $7,500 Tax Credit to 203k Rehab Loans (Buy a home and rehab to your liking)….

There are many pitfalls you can avoid when you are in the market to buy a new home. Here are just a few tips and strategies to help you prepare for success:

Overall Home Ownership is an achievement that offers a sense of pride, financial stability and potential tax advantages.

I have attached a document that outlines the cost benefits of Rent vs. Own.
Feel FREE to contact me for a No Obligation Rent vs. Own Mortgage Plan.
William Doom, CMPS. “Your Favorite Mortgage Planners Favorite Mortgage Planner!”

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FOMC Cuts Rates To Target Zero

The Fed has taken Historic Action and has established a Target Range vs. a Flat Rate.  Target range for the federal funds rate of 0 to 1/4 percent.

(This should be interesting for Prime? Credit and Money is NOW Cheep. Didn’t we do this in 2001-2003?)

Given the overall decline in the U.S. Economy, the FED announced that it is determined to use every tool possible to pull the economy out of the current recession. The FED is sticking to its guns and will continue to purchase Government debt and MBS as one of the Monetary Policy Tools.

“over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant.”

Interest rates change constantly, but it is important to know that rates are cyclical. If rates are currently at historical lows then we know there is a strong probability rates will go up again, and vice versa. Certain economic indicators such as unemployment data, consumer price index, retail sales data, and consumer confidence all have an effect on mortgage interest rates. But the key factor to watch is the relationship between stocks and bonds.

As always if you are thinking of Refinancing or Purchasing feel free to contact me for your No Obligation Mortgage Plan William Doom, CMPS Your Mortgage Planner. (1.888.271.3437 x7)

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Jeff A Clancy Gig Harbor Foreclosure (REO) Specialist.

Sign Of The Times - Foreclosure
Image by respres via Flickr

Jeff A. Clancy a Gig Harbor and Washington Realtor that specializes in helping buyers, investors, first-time homebuyers and veterans find the best deals in today’s HOT foreclosure market!
Jeff’s Most Recent REO, Foreclosure Listings

First Time Homebuyers and Investors interested in qualifying for a purchase of a Foreclosed Home, Please contact my Mortgage Planner William Doom, CMPS. (1.888.271.3437 x7) to see what you qualify for.


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4.5% Mortgage Rate, Is It True

Business television is abuzz  with talk of “4.5%”.  The news stems from a leaked story that the U.S. Treasury will intervene in the mortgage market, lowering rates a full percentage point below their current levels.

As cited by every journalist in every publication, however, the story is 100% speculation.  Naturally, that doesn’t stop the press from covering it.  Perhaps most importantly, nearly every analyst interviewed has expressed a belief that a Treasury-sponsored stimulus would apply to home buyers onlyHomeowners wanting a refinance, in other words, would be ineligible.

Mortgage rates are very low today compared to where they’ve been in 2006, 2007 and 2008.  If you think your mortgage rate is too high for this market, reach out to Your Mortgage Planner to review all of your options.  If rates really do reach 4.50%, you can always refinance again later.

rates12-3Rates Provided by Your Mortgage Planner William Doom, CMPS.

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