Miami Home Equity Loan
I have been out of school for about 3 years now and paying
$1,500 for rent. I have been thinking about buying a home because I feel
like I am throwing money away. What are some advantages of owning a home?
Is there anything else I should consider?Al.
Most people are financially are far better off renting. Any rent vs buy
calculator will show you that. The cost of the mortgage and Realtor
commissions will nullify any appreciation and tax benefits unless you plan
on staying an average of 5-7 years and luck is on your side. Home ownership
is the "American Dream." And it's just that, a dream. In REALITY the bank
owns your home and you are paying the bank rent yet you are completely
liable for everything from an injury on "your" property to your sewer
backing up into you well water. But take your pick. It's six of one half
dozen of the other.
Those who say their house appreciated tremendously aren't thinking past
their nose. What good is it to have a home that doubled in value in three
years only to find that once they sell at this "enormous profit" they can't
buy another home for less than the let they old one go for. Out of the
frying pan into the fire.
In addition, if sh_t happens and you lose your home a foreclosure it will be
in your public records FOREVER. If you can't pay the rent (at worst) it will
show only on your credit report for 7 years.
If common sense doesn't turn on a light in you mind, maybe the fact that the
Bush Administration has fervently promoted it might.
Paying rent is wasting money and your opinion is radical to say the least.
About 95% of a mortgage payment is pure interest, that's good because the
interest is 100% tax deductible. So while you throw $1,500 away every
month, I can deduct a whopping $1,425 a month (1,425.00 X 12 assuming the
payment even reaches 1,500...) $17,100.00 off of my federal income tax
return. For your information the bank does not own your home, the buyer
does, the bank simply has a loan secured by the home, so the bank can never
kick you out because "they want their son to live there" like a landlord
can. As long as you never fall 3 months behind on payments foreclosure is
impossible, and even then you have tons of alternatives such as bankruptcy
or a mediation service that can help work out an arrangement with the bank
like I do for people on occasion. Foreclosures do not remain permanently on
your credit score they are removed after 7 years I don't care what you
heard. I've also removed these negative marks on my client's reports within
only 6 months of a foreclosure and successfully got it removed as if it
never happened. The Bush Administration didn't create the home craze,
rational thinking people who watch their money did! (The home boom started
during the Clinton years so its not just a "republican thing") So your
opinion isn't only radical, its grossly incorrect.
As far as renting, sure you have a landlord that takes care of all of the
maintenance but you don't have a choice as to having tile floors or wood
floors, new cabinets, new lighting fixtures or adding onto your home and the
like. If you just need a cave to burrow into apartment living is fine, but
if you want a home you've got to go about it by buying property.
Its apparent you don't know much about real estate because buyers do not pay
a thing to realtors to buy real estate. The commission is prearranged with
and paid completely by the seller, so why should you care what the realtor's
commission is, the seller is the one paying for it. Closing costs are
shared between buyer and seller and depending on where you live in the good
'ole US of A so do expect that to be somewhere between 2-5% or so. But all
that aside real estate is the goldmine that has made more successful people
than probably any other industry. So if you don't buy now that you're just
out of school it will only be harder as interest rates climb and
availability becomes scarce.
As far as home being a dream, well here's how my personal home (which I
moved into simply because I liked it) breaks down. I purchased it with no
money of my own (no money down, yes it is very possible!) and left the
closing table with over $5,000.00. That's right I got paid to buy my home
and had two months with no payments by closing on the "right" day. As a
matter of fact I bought this house only about 16 months ago and at that time
I bought it 20% below market for only $130,000.00 when it was worth $160K,
its now worth just over $210K (and rising!) not even two years later I've
gained $80,000.00 which I don't have to sell my home to get at. I can
easily get an equity line of credit and borrow that amount against my home
at only 2.65% interest, that by the way is cheaper than the prime rate set
by the FED! I could then use that money to pay off some bills (which I
don't have), start a new business, travel the world (again), just spend it
or buy more real estate (my personal favorite!), all tax free. That's
right, its not income, its a LOAN so I pay no income tax on it! In fact, on
occasion I use that equity and loan it to other real estate investors at
double the interest rate I pay, so now I become the bank with all the
security knowing that my money is backed by very liquid and valuable real
estate.
So as you can see there are enormous advantages to owning real estate.
Hundreds more that I can't all mention all at once.
If real estate is expensive where you live, buy someplace else where you can
get your foot in the door. Florida is one of the best, everyone loves the
weather and people from far and wide are calling Florida (specifically
Miami) home. Check my website out and get some information on what you can
do to, with and about real estate.