Financial Factoring Behind Home Ownership

Maybe you are tired of paying your landlord’s mortgage and dreaming of owning your own home. It’s the American Dream, right? Who doesn’t want that sense of pride that comes with home ownership.

Calculating which is financially better for you, renting or buying a home can get very complex quickly. Not everyone is a thorough mathematician. I wanted to simplify the though process and provide some simpler guidelines for potential home buyers.

One of the first things I would consider as a home buyer is the length of time I intend to stay in the home. Buying a home and moving in a year or two doesn’t yield the financial benefits of staying a home for a decade.

Another thing I point out to my real estate clients, don’t bite off more mortgage than you can chew. Studies have shown that most bankruptcies in America happen over a mere $300 monthly cash flow problem. If you’re approved for $300,000 that doesn’t mean you should buy that much home. Keeping up with the Jones can cost you more than they have.

Renting or leasing a home can improve your credit score with a healthy payment history. Did you know owning a home and making your monthly mortgage payments on time has a more profound, positive impact on credit? Homeowners pay less for auto insurance. Lenders and credit-issuing companies smile on homeowners for borrowers being tied financially to a property. That doesn’t include you had to have good credit, or had to overcome bad credit, to purchase a house.

In your rent-or-buy-a-home calculations, you can’t just compare the monthly mortgage payment with the amount of a lease payment. You must consider the costs of a home warranty, maintenance costs and other things. Property taxes and homeowner insurance are included in the mortgage payments. The Homer Project put out a nice article, The Financial Logic of Home Ownership, with some other great insights on rent-or-buy-a-home considerations.

My point is, you need a safety net budget. Set aside an amount equal to 10% of your mortgage payment for maintenance. Maintenance expenses could be gas for a lawnmower or paying for lawn care services. What you don’t use save it toward a new roof, appliances or other big expense.

If you’re buying a home, you need to have more funds set aside for a variety of reasons. I suggest at least six months’ worth of bill paying power. If you’re renting and get laid off, you might be able to work it out with your landlord. Even if you can’t and are behind on rent, the impact to your credit is much less than defaulting on a mortgage.

Paying for an HOA is also a consideration, they can be expensive. Some exclusive neighborhoods charge HOA fees. More to calculate, some Home Owner Association fees include some maintenance like lawn care, garbage collection, snow removal etc.

One of the biggest things a would-be home buyer needs to think on is the market. With respect to location, rents and house values go up and down. You need to do some real estate market research before you buy a home.

Neighborhoods have an endless cycle of rise and decline. When a neighborhood is on the rise, house values go up. Sometimes house values rise for well over a decade. When a neighborhood is in decline, property values fall. There a lot of reasons for the direction a neighborhood takes. Check with your city planning, zoning can play a huge role on house values. Once a neighborhood had lovely views, now there’s a freeway or business expansion planned.

Buying a Foreclosed Home: Advantages and Disadvantages

So you’ve finally decided on buying your dream home, but have a small budget. You can still buy your dream home by buying a foreclosed home. Foreclosure is the legal process of recovering the loan balance from a borrower who has stopped making payments.

How to buy a foreclosed home?

If you’ve decided on buying a particular foreclosed property, speak to the owner and negotiate a deal with him. You can buy the property for a good price as the owner of the property will be looking to pay off his loan amount.

You can also buy a foreclosed property from the lending agency who has taken over the property after a particular grace period. Banks auction off foreclosed properties in quick time.

Do your homework before buying a property

Like most important purchases, you should do a thorough research on the property. Understand how the entire foreclosure process works, and also attend a few foreclosure auctions to get a hang of the process. Learn about the market value of the property and also about the history of the property.

Advantages

– Foreclosed homes come with a huge discount and you can buy a foreclosed home for around 25% lesser than the market value.

– Since there are numerous projects coming up, the prices of homes that are foreclosed have decreased even more.

– As the home is already built, you can move in immediately.

– You can confidently buy these homes without worrying about the legality of any of the documents as they would have been checked by the bank.

– Most foreclosed homes are quality homes in good residential areas.

– As you are buying a home from a government recognized financial institution or a bank, the seller can be trusted.

– You can complete the entire transaction in less than two months.

Disadvantages

– You do not get any warranty on foreclosed homes.

– As you are buying the property as-is, there may be many repairs and modifications that you may have to make. The previous owner may not have had money to pay his loan payments on time, so he may not have had any money to pay for repairs, either.

– The bank will also not give away any history of the property or the condition of the house.

– The previous owner may have had other debts like property tax or maintenance charge, which you may have to pay if you want buy the foreclosed home.

– Calculating the value of a foreclosed home can be a hard task.

– You may also have to pay utility bills like electricity bills and water bills.

– Banks may not offer you a loan for a home that is foreclosed as there may be legal problems in the property.

– You may have to pay the purchase price of the property only by cash. This can be an issue if you cannot get a loan from a bank.

Home Business Soaring – Economy Dwindling Becoming a Wealthy Marketer

Move over Bill Gates and make room for work at home Bob. Corporate scams and real estate disasters have helped people to empower themselves to work from home. Calculated risk can achieve great rewards for the person willing to make a stand. A $427 billion dollar home business industry certainly helps make this possible.

People are very attracted to the allure of becoming self employed. Not to mention the tax benefits. You can typically get involved with a credible home business for just a few thousand dollars. The survival rate of a home business is over 5 years compared to the high failure rate of retail and office space businesses. The reason is simple. When you work at home, you don’t incur the many additional costs associated with a traditional business. The rewards for becoming a wealthy marketer are countless.

Many people are beginning to realize that the ijnternet can automate 99% of their business. This is possible due to website exposure, search engine listings, auto-responders, and more. Of course, you still want to be available to provide the human touch that goes along with any successful business.

According to the IDC, a top research firm, there are over 34 million home offices in the United States. They also predict over a 7% growth per year. “America is in the midst of an extraordinary workplace transformation.” There seems to be no slowing it down.

The home business industry has no barriers and no prejudices. People from all walks of life are getting involved. Their backgrounds range from attorneys and doctors, to stay at home moms and college dropouts. Starting a home business isn’t as hard as some people may think. There are companies out there who offer turn-key programs. The great thing about the internet is the vast knowledge available at your finger tips.

Take websites for example. Free website software provides templates and cut and paste features. Anyone can learn how to build a professional website with the intenret knowledge thats available today. The crucial ingredient to any online or home business is that you must be able to reach your prospective clients or buyers. Having just a website isn’t always good enough. If no one knows your website exists, then no one will be able to do business with you. The good news is that there are countless ways of reaching prospective buyers for your product or service via the internet. Some methods do work much better than others. The best ways of marketing simply requires good old fashioned work. The upside is that there are many ways to market online which cost nothing except for your time. With a little bit of research, anyone can learn how to reach their target market and become a wealthy marketer.

Leverage is another key ingredient for success in today’s competitive world. Why try to corner the market yourself, when you can work with several people on the same goal? It frees up some of your time when you can delegate. A wealthy marketer knows this and that’s why they seek to be around like minded individuals. As with any successful business, you need to get connected with a few good people who can help you. One proverb to sum this up is.

“A committee never fails.”

The most successful online home businesses definitely provide a needed value to their market. Some online businesses can go way beyond successful and become outright significant. You definitely want to make sure you have a good profit margin to stay in business. If you are making $10 a sale, it might be awhile before you can quit your day job. There are many products and services out there that make a good profit. This can provide peace of mind knowing you won’t need thousands of sales to become a wealthy marketer from home.

We live in a very fast paced world today. It makes sense that America wants to work from home. When it comes to juggling a career with fixed hours, children, appointments, spouses, engagements, emergencies, and special occasions, it’s no wonder people want and need to generate an income that has flexible working hours. Who knows, if you are motivated enough, you too could find yourself becoming a home based wealthy marketer.