How are renting and buying different and the same???
Venstone AG
Advantages of Home Ownership Feelings of Permanence and Security
Incentive to Save
Tax Advantages/Improved Credit Rating
Investment Potential
What Are my options?
Consider these: How many people living in house Lifestyle Budget Neighborhood
Single Family Homes STAND ALONE!!!
Older Homes
Ready-built New Housing
Custom-built New Housing
Condominiums
Apartment style but owned
Same tax advantages
Own individual unit/ less insurance
Maintenance fee paid for common areas
Town homes & Duplexes Cross between Condo & Single Family Home
“Row Houses”
Private Entrances
Shared walls
Maintenance Fee for grounds upkeep & shared amenities
The Big Search… Choose a Neighborhood
Contact a Real Estate Agent
Inspect Homes (you/ expert)
Make an o er (earnest money= contract pending)
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Closing Costs
Terms to know: ➢Appraisal (opinion of an expert as to the fair market value) ➢Title – Legal papers show who owns it ➢Down Payment- Money you place toward the amount you pay for the house- this makes your payments less each month ➢Realtor Fees
What is a Mortgage? A large loan used to buy real estate (a home or land)
2 Parts to a mortgage:
■ Principle- The amount you borrow from the lender
■ Interest- You get charged interest on your loan based on how much you still owe.
About that Principle… It is common to make a down payment of 20% on the purchase of a home. Sooo…..
If you bought a $300,000 house, and put 20% down on it, your down payment would be $60,000! Your principle would then be:
$300,000- $60,000 (down payment)= $240,000- that is your principle!
Fixed Rate Mortgages (FRM)
The amount of the monthly payment is set for the full mortgage term – often 20 or 30 years.
Thus, if the monthly payment is $800.00, the buyer knows this amount will remain the same.
■ Even if the cost of living should double before the loan is repaid – the monthly payment remains $800.00
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Be sure to compare APR’s o ered by di erent institutions, in order to nd the best FRM.
Variable Rate Mortgages (VRM)
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When credit is hard to obtain – many nd they cannot get a FRM.
Lenders guarantee pro ts by o ering only VRM.
Variable rate mortgage is one in which the interest rate can change periodically.
There are several di erent kinds of VRM’s.
Adjustable Rate Mortgages (ARM)
These types of loans start at one APR, but then the rate can change.
Why do you think someone might want to have this type of mortgage?
What do you think this might be dangerous?
Thank You