|
Homeownership:
Wants vs Needs| Using
a Real Estate Agent | Using DPA |
Home Value |
The Offer | Inspection & Closing
| Closing Meeting |
Benefits & Responsibilities as a New Homeowner
Protecting Your Investment
Beyond the obvious monetary investment you have made, homeowners
enjoy many social benefits:
Social Benefits
| • |
Children of homeowners are more likely to perform
higher on academic achievement tests and are more likely to
finish high school. |
| • |
Parents who own their home are more apt to teach their children
financial management principles. |
| • |
Homeowners gain financially from living in a healthy neighborhood
and are more likely to teach their children correct social
behaviors. |
| • |
Low income homeowners participating in a lease-to-purchase
program experienced increased self esteem compared to their
counterparts who were renting. |
| • |
Homeowners have improved mental and emotional health compared
to renters. |
| • |
A later study discovered that homeownership is the second
strongest predictor of criminal activity in neighborhoods,
with household income being first. |
Homeowner Rights
As a property tax payer, you have a say as to how your neighborhood
grows and develops. If you have open land in your area, and a
developer wants to build, the city will give you notice to attend
a hearing about developer plans. After all, this will affect your
neighborhood and your future property values.
You can also petition your county tax commission if you feel your
property taxes are excessive. Most homes are based on market value
and an appraisal may be required to prove your market price. The
appraisal could prove either your or the county's position.
You can rent out your home if you are in compliance with local
zoning laws.
Tax Benefits
The largest tax benefit is the federal and many state tax deductions
allowed for interest paid on the mortgage. This can be extended
to not only the first mortgage but to second mortgages or line
of credit loans secured by your home.
The property taxes you pay, usually by the lender, are also considered
a tax deduction for federal and many state taxes.
Make a Budget and Live Within It!
A budget will help you meet your monthly bills, and therefore
help your credit. Demonstrating your ability to save and having
funds on hand will help you in the mortgage approval process.
Your personal savings should be sufficient to last several months
should you lose your job or source of income. Set a budget for
yourself on your projected mortgage payment.
Remember that your budget should include your utility costs and
a set savings amount for future home maintenance and repair costs.
Tips for Developing a Budget:
| • |
Determine your monthly income |
| • |
List your fixed expenses (bills that stay the same month-to-month)
|
| • |
List your flexible expenses |
| • |
Plan for large, periodic expenses |
| • |
Compare your income with your expenses |
| • |
Set priorities, goals and limits |
| • |
Set a savings plan and make it a priority |
| • |
Keep an emergency fund |
| • |
Plan ahead for major purchases to avoid impulse decisions
|
Tips for Sticking to a Budget:
| • |
Be determined and exercise willpower |
| • |
Be prepared to compromise |
| • |
Develop a user-friendly system of documenting expenses |
| • |
Be creative and use non-monetary incentives |
Section 6: Understanding
Refinancing
Wants vs Needs| Using
a Real Estate Agent | Using DPA |
Home Value |
The Offer | Inspection & Closing
| Closing Meeting |
Benefits & Responsibilities as a New Homeowner
|
