Pros and cons of home ownership

PRO
A Place to Call Your Own Perhaps you are ready to settle down in your community and want to have the feeling of permanence and involvement that comes with owning your own home. Maybe you need more space for your family. Or maybe you want more freedom than you currently have as a renter to change your home to suit your individual taste and needs.


CON
Financial trouble from illness or loss of a job: When you own a home and fail to keep up with your mortgage payments, the mortgage lender could call the loan, which means payment in full or foreclose on the mortgage. This could result in the loss of your home as well as the equity you've built. A renter, on the other hand, can downsize to a cheaper apartment to cut expenses


PRO
Another interesting thing is when you own a home, your credit rating goes up a lot as well, thus you are able to get better loans at a lower interest rate.

CON
Your home loan needs to be paid on time and so is your home insurance. Therefore, it can take a toll on your financial commitments. So be sure to plan your home loan payments properly. Though there are various tax rebates and deductibles when owning a home, you still need to pay property tax each year.


PRO
Scheduled Savings When you are a homeowner, your monthly mortgage payments serve as a type of savings plan. Over time you will accumulate what lenders call "equity," an ownership interest in your house that you may be able to borrow against or convert to cash by selling the house. On the other hand, renters continually pay rent to a landlord for as long as they rent without the opportunity to build up equity.

CON
You are also liable for any damage that is caused to your neighbor´s property if the cause comes from you or your property. An example would be a fire breaking out from your home and spreading to your neighbor´s homes damaging their properties. In this instance, you are liable to pay for the damages caused.

PRO
Retirement Savings: Long-term home ownership can provide beneficial retirement security through the growth of equity.

CON
There are no guarantees: Even if you work hard at maintaining your home, property values can drop, depending on the neighborhood in which you live. This is why it's important to choose a house and neighborhood that have strengthening value in the real estate market.

PRO
Stable Housing Costs While rents typically increase year after year, the principal and interest portion of most mortgage payments remains unchanged for the entire repayment period. Because of the effect of inflation, you pay the same amount with ever "cheaper" dollars.

CON
Repair and Maintenance. Don't forget that responsibilities such as mowing the lawn and taking care of needed repairs come along with home ownership. Actually, the promise of getting the advantages of home ownership without the accompanying repair and maintenance responsibilities is a major factor in the popularity of condominiums. As an owner, you must pay for any unexpected costs such as a new roof or heating system. This is why a family budget and a savings strategy are important

PRO
Tax Benefits Homeowners are eligible for significant tax advantages that are not available to renters. Most important, the interest paid on your home mortgage usually is tax deductible and therefore can save you a substantial amount each year in federal income taxes. There may be tax deductions for improvements you do to the home. Check with your CPA or tax preparer as tax deductions change often.

CON
High Costs Usually you can expect to pay more for housing as a homeowner than you did as a renter, especially for the first few years. Even if your mortgage payments are less than your previous rent payments, as a homeowner you must also pay property taxes, homeowners insurance, all utilities, and upkeep expenses.

PRO
Increased Value Houses typically increase in value over time. It's not unusual for a house that sold fifteen years ago to be valued at much more than its selling price today. This increased value is as good as money in the bank to the homeowner.

CON
There are some disadvantages to owning a home. For example, you are liable for any accidents and injuries on your property. Getting a home insurance policy covering such cases can offset this. However, there is a cost involved.

PRO
Once an owner, always an owner: A first home often leads to a better second home. Owning and properly maintaining the property also offers a sense of accomplishment.


PRO
A home is yours forever. As long as you can afford the mortgage and taxes, you don't ever have to move. There's no landlord to terminate your lease, raise your rent or deny you permission to make changes to the property.

My bottom-line advice: Buying a home I believe is a good investment because it is yours. It forces you to save and build for your future. Sure you could rent cheaper but you live by somebody Else's rules. So when you buy don't over-invest in your home, either when you buy it or when you make subsequent improvements. Buy only as much house as you need. Plan to stay a long time. Don't view your home as your primary retirement savings. You home will bring you many memories, long term stability, and a sense of pride. Whether you own a home in Livingston County, Wayne County, Washtenaw County, Oakland County, or Macomb County it is a start towards your future. Search for Livonia houses for sale, Novi houses for sale or any Michigan homes for sale.
For more mortgage and real estate information go to my website www.russravary.com

I also have a great Michigan things to do section for lots of fun things to do in Michigan.

May life treat you and your family well this weekend.

Russ Ravary

First time home buyer

Buying your first home can be scary, but if you follow these tips, you will do just fine! Many young people do not realize that they can afford a home, they can get approved for a mortgage. Sometimes you need little or no money to buy a home. There are Government programs for first time homebuyers (FHA) and there are 100%, no money down programs.

The key is to plan ahead. You may need to repair your credit, save for a down payment, get more time on a job, save for closing costs. You need to know what you have to do to get started. You may be one of the "great buyers" and have everything you need to get started right now and not know it!Many times you do not need money. We can ask the seller to pay your closing costs. There are many programs that offer low rates and no money. 100% financing may be the way to go for you. But taking the first step and seeing what you need to do now is important. It will make the home buying process so easy. Call me to set up an appointment to go over your credit report, and credit scores.
You may have imperfect credit, have to much debt, or improve your credit scores. The key is to get started. Even though you may have bruised credit, or too much credit I have helped many people improve their credit. They then we able to buy homes.
Create Your "Wishlist"Make your wish list. Focus on the features you want in a home: 2 bedrooms or 3? 1 bath or 2? Garage or no garage? Knowing what you're looking for will help you focus your search. And it will help your local Wayne County real estate broker, too.

Search Michigan houses for sale. Think about where and why you want to buy in an area. How far to work? School? Family?Drive by, and look at many Wayne County homes (again we handle Oakland County houses for sale, Washtenaw county houses for sale, Livingston County houses for sales, as well as Wayne county houses for sale. We just use Wayne county as an example in this report). See as many possible to get a better feel for ones available in your price range. Visit my site often and search for homes. Keep track of what you like and dislike about each home that you visit by printing and using our Home Visits Worksheet.
Also consider the market value of the home, any special circumstances surrounding the sale of the home, how much you can afford to pay for the home, and the condition of the home when determining whether the home is right for you.
When you find a Wayne County home in your price range and you want to buy it, visit the Wayne County neighborhood at various times to get a more complete understanding of its activity. Talk with your prospective neighbors about what it's like to live in the area. Take a day and commute to your job from the area. And look at the home more critically -- you may discover flaws you hadn't noticed during your first visit.
Another aspect to consider is the financing you will use to purchase the home. For example, the seller may help pay closing costs such as transfer taxes or points on a mortgage. If this is the case, you may be more willing to accept the seller's asking price. Your local Wayne County real estate sales professional (Russ Ravary) can offer some assistance regarding how much you should offer, but the final decision is yours.

Mortgage fraud

Today was another tough day in the mortgage world. I had a loan approved at a major lender for a 100% loan on Friday. Today PMI insurers made a change in their guidelines. They will no longer insure 100% loans when the borrowers credit score is less than 575. Unfortunately my borrowers credit score is less than 575 and now they will only loan him 95% instead of the 100% they would on Friday.
It is just another sign of how much the banks are tightening up the credit guidelines.

On another front I had a real estate agent arguing with an appraiser. They had a purchase agreement for $250,000. The appraiser could not find a comp that would support a price of over $235,000. The real estate agent was upset with that answer. When my appraiser asked her what comps she used to set a price on the house, this is what she said. Well I sold a house in that sub over a year ago for $250,000. Do you think she might have been a little smarter and realized that the housing prices in Metro Detroit are falling. (and across the country) She didn't want to tell her seller's that the house was no longer worth the $250,000 they paid for it let alone the $50,000 they put into it. The agent wanted to know if my clients had $15,000 to come to the table with. What did she think that we were stupid. Why would we buy a home that would not comp out. She wanted to use comps from over a mile away and disregard the close ones. That agent wanted my appraiser to commit appraisal fraud or mortgage fraud so she could make a commission. Shame on her!!!!

Don't let an agent do that to you. If an appraiser tells your mortgage guy that the house won't comp out to the purchase price. Either the sales price has to come down or you need to move on and find another home. The buyer's agent was smart enough to do just that. And you can too. There is absolutely no reason to overpay for a home in this market.

For more mortgage information go to http://www.russravary.com

May you work with an honest agent that looks out for your interest.
Russ Ravary

basic mortgage information

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I have been in the mortgage business for seven years now. I have worked in shops that have specialized in hard to do loans, and a shop that specialized in people with good credit (we beat the banks rates and fees day in and day out) So whether you are self employed, have financial difficulties, been in bankruptcy, or have great credit I can help you out with good rates and lower closing costs. My philosophy is to do more loans at a lower price and I will get more referrals. I will make up the money but getting more loans. It has worked for me over the years. I have done over a $100 million dollars of loans for my clients over the years. What that means to you is that I have a lot of experience in doing loans for people with great credit and for people who have had credit problems. So check out what I can do for you. I am the type of person that I will not do the loan just to make money if it does not make sense for you. There are a lot of mortgage guys that will put you into a bad loan just to make money. So if you are looking for a Michigan Mortgage give me a call at (313) 310-9855 or email me at ourmortgageguy@yahoo.com.
FHA Loans General FHA Loan Information

Bankruptcy and buying a home

You have been through bankruptcy and you would like to buy a home. Here are the steps you need to take to get you on the right path of good credit.
When banks look at you for credit cards and home mortgage applications they look at your credit score. You credit score is determined by many factors. One is your credit history or payment history. This is one of the key factors in determining your credit score. They look at how many times you have been late on a payment, or how many accounts you have not paid at all or went to collection. Even if it is a small payment of $15 you still need to make the payment on time. They look at how many times you have been 30 days late, 60 days late, 90 days late, and 120 days late. The more often you are late and the longer you are late will lower your credit score. If you don’t pay at all or let the account go into collection then it is even worse.
If you have ten accounts and eight of them have been late and only two are paid on time your credit score is going to be low.
So the key is to get as many accounts paid on time each and every month. Be consistent. Strive to make every payment on time. If you have come out of bankruptcy you most likely have no open credit lines. You want to get at least 2 or 3 open credit lines. If you have to get a secured credit card. Go to http://www.russravary.com/ and go to the site map and see secured credit card in the credit section for more info on secured credit cards.
What do you mean get more credit after coming out of bankruptcy? You have to have credit in this world to get ahead. The secret is learning to live within your means and to use credit sparingly. You must have a credit history to buy a house. So you must learn must learn to use credit correctly. And you must have open credit lines. Learn to use credit cards to buy necessities such as gas or food and be sure to put the money aside and pay the bill on time each and every month.
That is number one to get at least one open line of credit open immediately. The longer you have the open line paid consistently on time the better the lender likes you. Over time you need to get 2 –3 open lines of credit.
The number two step is if you are renting is to pay your rent out of your checking account. If you do not have a checking account get one opened and pay your rent out the account every month. You need to be able to prove to the bank that you have paid it on time. Cashiers checks, money orders, and rent receipts mean nothing to the lender. They want to see a cashed check and nothing else. So remember the number one thing to do is to get at least one open line of credit started right away, make the payments on time each and every month. Pay the credit card off each month. This will get you started on the path to home ownership.
Remember live within your means, have some extra savings and that will help you buy a home and keep it with out going into foreclosure.
Russ Ravary