5 Powerful Reasons to Own Instead of Rent

5 Powerful Reasons to Own Instead of Rent | MyKCM

Owning a home has great financial benefits.

In a recent research paper, Homeownership and the American Dream, Laurie S. Goodman and Christopher Mayer of the Urban Land Institute explained:

“Homeownership appears to help borrowers accumulate housing and nonhousing wealth in a variety of ways, with tax advantages, greater financial flexibility due to secured borrowing, built-in ‘default’ savings with mortgage amortization and nominally fixed payments, and the potential to lower home maintenance costs through sweat equity.”

Let’s breakdown 5 major financial benefits of homeownership:

1. Housing is typically the one leveraged investment available

Homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. A 20% down payment results in a leverage factor of five, meaning every percentage point rise in the value of your home is a 5% return on your equity. If you put down 10%, your leverage factor is 10.

Example: Let’s assume you purchased a $300,000 home and put down $60,000 (20%). If the house appreciates by $30,000, that is only a 10% increase in value but a 50% increase in equity.

2. You’re paying for housing whether you own or rent

Some argue that renting eliminates the cost of property taxes and home repairs. Every potential renter must realize that all the expenses the landlord incurs (property taxes, repairs, insurance, etc.) are baked into the rent payment already – along with a profit margin!!

3. Owning is usually a form of “forced savings”

Studies have shown that homeowners have a net worth that is 44X greater than that of a renter. As a matter of fact, it was recently estimated that a family buying an average priced home this past January could build more than $42,000 in family wealth over the next five years.

4. Owning is a hedge against inflation

House values and rents tend to go up at or higher than the rate of inflation. When you own, your home’s value will protect you from that inflation.

5. There are still substantial tax benefits to owning

We know that the new tax reform bill puts limits on some deductions on certain homes. However, in the research paper referenced above, the authors explain:

“…the mortgage interest deduction is not the main source of these gains; even if it were removed, homeowners would continue to benefit from a lack of taxation of imputed rent and capital gains.”

Bottom Line

From a financial standpoint, owning a home has always been and will always be better than renting.

Ready to buy? Call/text us at 703-242-3975

69% of Buyers are Wrong About Down Payment Needs

The Belt Team sells lots of homes to first-time homebuyers and invariably when we meet for the first time, there are lots of misconceptions about what it takes to buy a home. How much money you need for a down payment is almost always one of them.

Here’s an article from Keeping Current Matters about some of the mythunderstandings:

69% of Buyers are Wrong About Down Payment Needs | MyKCM

According to a recent survey conducted by Genworth Financial Inc. at the Annual Mortgage Bankers’ Association Secondary Market Conference, mortgage professionals say that first-time buyers still believe a 20% down payment is necessary to buy in today’s market.

Nearly 40% of mortgage industry professionals surveyed believe that a lack of knowledge about the home-buying process is keeping potential buyers on the sidelines. Saving for a down payment is often cited as a huge barrier for first-time homebuyers to make the leap into homeownership.

If homeowners believe that they need a 20% down payment to enter the market, they also believe that they will have to wait years (in some markets) to come up with the necessary funds to buy their dream homes.

The greatest source of confusion cited in the survey results centered around down payments. The results are broken down in the chart below:

69% of Buyers are Wrong About Down Payment Needs | MyKCM

Rohit Gupta, CEO of Genworth Mortgage Insurance had this to say,

“While first-time homebuyers continue to drive the purchase market, we believe many are staying on the sidelines due to the misconception that a 20 percent down payment is required to secure a mortgage.

There are various low down payment options available today that allow prospective homebuyers to reach their dreams of homeownership sooner. It is crucial that, as an industry, we proactively educate eligible borrowers about solutions that will enable them to buy a home when they’re ready.”

Bottom Line

Don’t let a lack of understanding of the home-buying process keep you and your family out of the housing market. Let’s get together to discuss your options! Call The Belt Team at (703) 242-3975.

What Info Is Needed To Apply For A Mortgage

Tips For First-Time Homebuyers

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Slaying Home Buying Myths

We get questions from first-time homebuyers like this all the time:

  • Do I have to have a perfect credit score?
  • Do I need 20% cash for my down payment?
  • Aren’t interest rates really high?
  • Can I really afford to buy?

Check out what Keeping Current Matters has to say about the myths related to buying a home:

Slaying Home Buying Myths [INFOGRAPHIC] | MyKCM

Some Highlights:

  • Interest rates are still below historic numbers.
  • 88% of property managers raised their rent in the last 12 months!
  • The credit score requirements for mortgage approval continue to fall.

The Belt Team has a Buyer Specialist whose expertise is First-Time Homebuyers. If you’re looking for someone to walk you through each step of the process, call Beth Dadisman at (703) 577-1144. Or click here to schedule a FREE consultation.

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Here’s how you might feel after you buy your first place! We helped these first time homebuyers find their dream home and go to settlement just last week! The Belt Team is ranked in the Top 20 Real Estate Agents in the State of VA (out of 30,000 agents). Don’t you deserve the BEST?!

The Belt Team Specializes in First Time Homebuyers

Slaying Homebuying Myths

The Belt Team had a very successful first-time homebuyer seminar recently. And what we have found over time is that there are a lot of “mythunderstandings” out there about what it takes to buy a home – whether it’s your first home or your fourth. Here’s a great article from Keeping Current Matters that “slays” those myths!

FACTS:

  1. Interest Rates are still below historic numbers.
  2. 88% of property managers raised their rent in the last 12 months!
  3. Credit score requirements to be approved for a mortgage continue to fall. The 723 average score is the lowest since Ellie Mae began reporting on scores in August 2011.
  4. The average first-time home buyer down payment was 6% in 2015 according to NAR.

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What You Need to Know About Buying A Home

 

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Schedule a FREE Buyer Consultation with Our Lead Buyer Specialist or call (703) 242-3975 for more info.

Rents Continue To Rise – Now May Be The Time To Buy

If this is how you are feeling . . . . NOW is the time to investigate buying your first home! 

Should I Rent or Buy
Credit: Keeping Current Matters

Did you know that rents are rising faster than the income of renters is rising? A recent NAR study revealed that over the last five years a typical rent rose 15% while the income of renters grew by only 11%.

Credit: Keeping Current Matters
Credit: Keeping Current Matters

 

Sign up TODAY for our FREE First-Time Homebuyer Seminar. We’ve gathered a team of experts to answer YOUR questions and help you figure out if now is the right time to buy. Call (703) 242-3975 or find out more here.

Homebuyer Seminars Northern VA

 

 

 

What Info Is Needed To Apply For A Mortgage

Documents Needed For Mortgage Loan

If you’re thinking about buying a home, one of the most important things you should do is get a loan PRE-APPROVAL (not just a loan pre-qualification, but a FULL approval.)

This will let you know what you qualify for and it will be something a Seller expects to see when you write a contract.

Your Realtor can connect you with reputable, trustworthy lenders.

Here’s a list of some of the paperwork you’ll likely need to gather to give to your lender:

  • Most recent 30 days of pay stubs (if you are an employee)
  • Year-to-date profit & loss statement (if you are self-employed)
  • Last two years’ W-2’s & personal tax returns
  • Last two years’ 1099’s & business tax returns (if self-employed)
  • Two most recent months of bank statements for each account (all pages – savings, checking, money market, securities, etc.)
  • Copy of driver’s license
  • Mortgage statements, insurance info, property tax bill & HOA statement for each property owned (if you do not own property and are renting – contact info for landlord)
  • Divorce decree and separation agreement (if applicable)

Once you make application – here are a few tips:

DO:

  • Respond quickly to requests for additional info from the lender (and there are almost always additional requests or clarifications needed)
  • Stay current on all your existing accounts
  • Pay off any existing collections, judgments or tax liens

DON’T:

  • Open new credit cards
  • Take out a new loan or lease
  • Don’t let people run credit checks on you
  • Don’t make any major purchases (furniture, car, boat)

Once your loan is approved, you are ready to start looking for your DREAM HOME!

Search our state-of-the-art home search site.

Call (703) 242-3975 or click here to schedule a FREE Buyer Consultation. We are happy to provide a personalized consult that will include:

  • Lifestyle Interview
  • Market Overview
  • Overview of the Homebuying Process
  • Your Home & Neighborhood Wish List
  • The Best Advocate & Assembling Your Team
  • What’s Next

In 2015, The Belt Team was named to the “Top 20 Best Real Estate Agents” in Virginia list by Real Trends, as well as listed in Washingtonian Magazine’s “Best of Issue” for Realtors.

Best Real Estate Agents in Virginia 2015 - The Belt TeamWashingtonian Best Real Estate Agents 2015

 

 

 

Home Buyers – Don’t Let Your Heart Get Broken

Most people looking for a new home start their search online. In fact, according to the NAR, 43% of home buyers used the internet as the first step in their search. And 92% of buyers used the internet in some way as part of their search.

We don’t have statistics for this next fact, but based on our experience we can tell you it’s more common than not.

“Buyers shopping for homes often have their hearts broken.”

In fact, we are so sure of this fact that if you are a Buyer yourself, we will hazard a guess this has happened to you. You search and search and search. All of a sudden you find THE house online. The one you’ve been looking for. The PERFECT one. You call the agent. And it turns out it’s already under contract. Or maybe it’s already even SOLD! Many buyers who come to us have had this happen over and over before they started working with The Belt Team. Don’t let this happen to you. Because once you see the perfect house – nothing else will seem to compare.

Broken Heart - The House Is Already Sold

If you do a Google search for homes, your search will often yield info about homes that are not on the market. Even if you use the most popular search sites like Zillow, Trulia or Realtor.com – you’ll often gather inaccurate or untimely search results.

What’s the answer?

Use the same service that we as Realtors use to help our clients find homes. It feeds directly from the local MLS and is updated more frequently than other sites. Our team invests tens of thousands of dollars per year to have access to this system. (Note: This is just ONE of many special technologies we pay for to enhance our clients’ real estate experience. Per NAR, the average Realtor only spends $848/yr.)

Yes, you will need to register to use it. The system is really easy to use, and it has so many bells and whistles that we want to ensure you are finding EXACTLY what you’re looking for. Time is money. And YOUR time is valuable. Don’t waste it looking at homes that may not be available.

Try it out. We’re pretty sure you’ll like it. (And by the way – it’s FREE to you and there is NO obligation.)

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(We also have a FREE, Instant Home Valuation Tool if you have a home to sell and are wondering what it might be worth.)

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The Belt Team is one of the top teams in the world for Keller Williams Realty, the largest real estate company. This is why we have access to tools such as our state-of-the-art home search site. But more important than numbers are people. Every client is important to us. Our mission statement is “Changing Lives For The Better“. If it’s time to change YOURS, give us a call at (703) 242-3975.

(Read what clients have posted about our agents Terry Belt, Kevin Kleifges, Tom Reilly, Beth Dadisman, Gail Belt, Martin Bristow & The Belt Team on independent site ZIllow.com here.)

Beware Commission Breath!

Commission Breath

Last night I had an interesting conversation with a young bartender named Marissa at the restaurant we frequent. She casually commented to me that her mother had told her she should get her real estate license. I responded that I thought it was a great idea. (She’s very intelligent, personable, great at customer service, puts others first and has an amazing work ethic – working two jobs.)

She promptly shriveled her nose in disdain.

I don’t think I would ever want to be a real estate agent!

I had to laugh, being that I’ve been in the real estate business for almost 30 years now. So I asked her what it was that made her think she wouldn’t like real estate. Her response?

I could never be a pushy sales person. I can’t imagine pushing people to buy a house. Like, we’re talking where they LIVE! That’s just not in me.

My response?

That’s exactly why you SHOULD get into real estate.

Marissa’s response is probably not an unusual one. Perhaps you have had that pushy sales person experience yourself. If so – here’s our advice:

Don’t walk, RUN!

We have a saying for agents who operate that way. It’s called “Commission Breath”. If you smell commission breath, then you need to find yourself a new agent. if you feel like your agent is more interested in their commission than they are in your best interests – it’s time for a change. Don’t sign a Listing Agreement or a Buyer Broker Agreement until you are confident you will be well represented. YOUR interests MUST come first!

Our team has been helping clients buy & sell homes for more than 40 years. Over that time we have clients we have worked with over and over – some have even bought & sold more than 10 homes with us. We also have clients who have sent us their children. And their grandchildren. We have a long term view of the world. Our integrity is everything to us. One commission is never more important than one client and their best interests.

In fact, there are lots of times where we advise a client AGAINST buying or selling. When we work with buyers, we point out both the positives and the negatives. And it can be heartbreaking to see a buyer fall in love with a house, only for us to advise that we think it not in their best interests to buy. We’ve also met with Sellers who think they want to sell, and we advise them to wait. (Oftentimes this is the case when someone loses a spouse. Making a decision about selling too soon can be devastating.)

If you smell commission breath, RUN!

The Belt Team’s Mission Statement is “Changing Lives For The Better”. If you’re wondering what it’s like to work with us – check out The Belt Team’s Mission, Vision, Values & Beliefs. And check out our client reviews on independent site Zillow.com. (We have NO control over what is posted there.)

If it’s time to change YOUR life for the better, email The Belt Team or call Terry Belt at (703) 242-3975!

Search our state-of-the-art web site for homes for sale in Northern Virginia

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P.S. If YOU are thinking about getting your real estate license, reach out to us. We are happy to talk to you and our Keller Williams McLean Great Falls office offers top-notch training!

Top Northern VA Real Estate Team

 

 

 

 

 

Mortgage Minute for HomeBuyers: “What’s A Qualified Mortgage?”

New mortgage guidlelines

If you’re buying a home in Northern Virginia, you may have heard talk of new mortgage guidelines & regulations, but aren’t sure what that means for you. So we asked our Partner Paul Diaz, Senior Loan Officer with New Penn Financial, to explain.

Northern VA Mortgage Financing
Paul Diaz

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What Is A “Qualified Mortgage”?

Lenders that follow underwriting guidelines and product guidelines exactly when they write a loan will be considered to be making a ‘qualified mortgage”. “Qualified mortgages” will provide lenders and borrowers certain legal protections in the event the borrower should default.

Lenders will more than likely still write mortgage loans that are not considered to be qualified mortgages, but because they will lose some protection should the borrower default on a mortgage loan, most other lenders might just stick to the new definition and stay within the guidelines. This may mean less flexibility in the marketplace for some buyers.

Parameters for a qualified mortgage are as follows:

  • Have a loan term of 30 years or less.
  • Not have negative amortization (monthly payment must cover all the interest due).
  • Not be an “interest only” loan.
  • Not be a “balloon payment” loan where a large lump sum of the principal is due back at one time (exception made for small lenders).
  • Upfront points and fees must not exceed 3 percent of the total loan amount. Note: This cap on points and fees may make lenders less likely to offer smaller loans (less than $100,000).
  • Debt-to-income ratio may not exceed 43 percent. *Note: This can be superseded if the loan is originated and kept in portfolio by a qualified small lender, or if the loan is approved by FHA, VA, USDA, RHS, Fannie Mae or Freddie Mac. But it may become harder for people with higher debt loads to get approved for a new home if they cannot stay below the 43 percent debt-to-income ratio.

This last guideline is likely to affect many Buyers in Northern Virginia.

_________________________________________________________________

If you’re wondering how much of a mortgage you can qualify for, contact our partner Paul Diaz at New Penn Financial. He can help you analyze the loan product that works best for your needs and help you get pre-approved for a mortgage. This gives you the power of a CASH buyer!

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Appraisal Came In Low! Now What?

Northern Virginia housing prices may be rising, but appraised values often lag.

Whether you’re selling a home or buying a home, this can be a problem. It’s not uncommon for a home to sell quickly, sell with multiple competing offers and net a sales price ABOVE list price – only for things to come to a halt because the appraisal comes in low.

Northern VA Real Estate - Low Appraisal

Changes in the Northern Virginia Regional Contract that took effect January 1 could be in your favor though. (You can read about other BIG changes in the contract here.)

One strategy that’s used to battle a low appraisal is to find additional comps the appraiser can use. Oftentimes – that means finding homes that may be under contract, but not yet settled. These homes are likely to have higher sales prices than comps that closed months ago – especially as we head into the hot spring market.

In the past, Realtors were reluctant to release information to appraisers about sales prices until the home had actually settled. But new language in the Northern VA sales contract means this process may become much more common. January 1 changes added a new paragraph called “Disclosure of Sales Price to Appraiser”. The contract now gives authority to brokers to release the sales price of the contract to any appraiser who contacts them to obtain the information.

Although the contract has changed, changes in actual practice often happen slowly because many Realtors are part-time and/or sell very few homes. This means they are not always intimately familiar with the contract and the form changes that happen every six months. This is just another example of why it’s SO important for buyers and sellers to choose Realtors from among the top 10%. The more homes they sell, the better they are at protecting you and avoiding/solving problems such as low appraisals.

(Read more about what happens when your appraisal comes in low.)

Search Northern VA homes for sale on our state-of-the-art website.

How Much Is My Northern Virginia Home Worth?

New Strategy For Buyers To Compete In A Low Inventory Housing Market

The Belt Team’s mission is “Changing Lives For The Better” – if it’s time to change YOURS, contact us at (703) 242-3975.