Like the guy in the video says, the two do not really compare at all. The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity take advantage of tax benefits and protect yourself against rent increases.Also, you may be at the mercy of the landlord for housing. Owning a home has many benefits. When you make a mortgage payment, you are building equity increasing YOUR net worth. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities like insurance, real estate taxes, and upkeep which can be substantial. But given the freedom, stability, and security of owning your own home they are worth it.
We are often asked why there is so much paperwork mandated by the bank for a mortgage loan application when buying a home today. It seems that the bank needs to know everything about us and requires three separate sources to validate each and every entry on the application form.
Many buyers are being told by friends and family that the process was a hundred times easier when they bought their home ten to twenty years ago.
There are two very good reasons that the loan process is much more onerous on today’s buyer than perhaps any time in history.
The government has set new guidelines that now demand that the bank prove beyond any doubt that you are indeed capable of affording the mortgage. During the run-up in the housing market, many people ‘qualified’ for mortgages that they could never pay back. This led to millions of families losing their home. The government wants to make sure this can’t happen again
The banks don’t want to be in the real estate business. Over the last seven years, banks were forced to take on the responsibility of liquidating millions of foreclosures and also negotiating another million plus short sales. Just like the government, they don’t want more foreclosures. For that reason, they need to double (maybe even triple) check everything on the application.
However, there is some good news in the situation. The housing crash that mandated that banks be extremely strict on paperwork requirements also allowed you to get a mortgage interest rate probably at or below 4%.
The friends and family who bought homes ten or twenty ago experienced a simpler mortgage application process but also paid a higher interest rate (the average 30 year fixed rate mortgage was 8.12% in the 1990’s and 6.29% in the 2000’s). If you went to the bank and offered to pay 7% instead of <4%, they would probably bend over backwards to make the process much easier.
Instead of concentrating on the additional paperwork required, let’s be thankful that we are able to buy a home at historically low rates.
Tired of renting and/or being a Tenant(s)? Thinking of selling your home?, looking to upgrade?, First Time buyer(s)? Buying your dream home this year? Call us, you know you can count on our help every step of the way while reaching your goal faster, easier and with a smile on your face. 📞786.554.8063 📧George@GeorgeAssal.com 💻 www.GeorgeAssal.com
On July 12th, we posted an article called “What is a Housing Bubble? Is One Forming?”, last week, the National Association of Realtors (NAR) released their Existing Home Sales Report. The report announced that the median existing-home price in June was $236,400. That value surpasses the peak median sales price set in July 2006 ($230,400). This revelation created many headlines exclaiming that home prices had hit a “new record”:
Wall Street Journal: Existing-Home Prices Hit Record
USA Today: Existing home sales surge, prices hit record
Though the headlines are accurate, we want to take a closer look at the story. We do not want people to believe that this information is evidence that a new “price bubble” is forming in housing.
NAR reports the median home price. That means that 50% of the homes sold above that number and 50% sold below that number. With fewer distressed properties (lower valued) now selling, the median price will rise. The median value does not reflect that each individual property is increasing in value.
Below are the comments from Bill McBride, the author of the esteemed economic blog Calculated Risk. McBride talks about the challenges with using the median price and also explains that in “real” prices (taking into consideration inflation) we are nowhere close to a record.
“In general I’d ignore the median sales price because it is impacted by the mix of homes sold (more useful are the repeat sales indexes like Case-Shiller or CoreLogic). NAR reported the median sales price was $236,400 in June, above the median peak of $230,400 in July 2006. That is 9 years ago, so in real terms, median prices are close to 20% below the previous peak. Not close.”
Earlier this week, the Wall Street Journal covered this issue in detail. In this story, Nick Timiraos explained that this rise in median prices is nothing to be concerned about:
“Does this mean we have another problem on our hands? Not really…There may be other reasons to worry about housing affordability by comparing prices with incomes or prices with rents for a given market. But crude comparisons of nominal home prices with their 2006 and 2007 levels shouldn’t be used to make cavalier claims about a new bubble.”
Home values are appreciating. However, they are not increasing at a rate that we should have fears of a new housing bubble around the corner. Fear of loosing the opportunity of buying or selling your home? Call us, We at the ASSAL team want to make sure you overcome your fears and reach your goal faster, easier and with a smile on your face! Give us a call today at 786.554.8063 or send us an email at firstname.lastname@example.org– you can count on our help every step of the way.
Last week I was having a conversation with a friend, and she asked me a question I get often—Why do you call yourself the neighborhood realtor?
It comes down to one simple reason—I would never put you somewhere I wouldn’t live. And when I’m making a decision about where to live, I’m taking years of experience into account and taking zero risk. The surroundings of your new home, your future neighborhood, can be just as important as the house itself. And if I’m going to help you find a house, or buy one for myself, I’m thinking about the following things:
- The neighbors and the block around the corner
- The school district
- The reason cited for the current home owner’s decision to sell
- Other homes up for sale in the area
- Predicted increase or decrease in property value
If you run every morning, I’m going to take a walk around the block to make sure you’ll feel safe beyond your street. If you have kids, I know that you’re looking to put their education first—and in Miami, location is everything. If you’re an investor, I’m going to make sure that your real estate investment is based on proprietary market insight and research. And if you work in another part of town, I’m going to have a good estimate on what your commute will look like every morning and what upcoming construction could affect that.
I know the questions to ask, so that you don’t have too, and in fact, I have customers for this very reason in my own neighborhood of Silver Bluff.
As a 26-year-old arriving to the United States, I worked hard to have a piece of the “American dream” and one of the biggest parts of that dream is home ownership. Home ownership isn’t something I take lightly, as I know the work it takes to get to that point, and it is no coincidence that I got into the business of helping people find homes. Whether you are looking to find your first home or make a move into a much bigger one, I’m ready to be part of your process start to finish, in English or Spanish, night or day.
A proud Venezuelan born to Arabic parents, my time in the US was not my first exposure to hard work or a dream for better opportunity. My parents owned a store where I spent my summer vacations, and I shared my parents’ love for working with people and their strong work ethic—something I incorporate into my work every day, and something I’m looking forward to sharing more and more with you on this blog.
Moving forward, I’d like to share more of my insight on neighborhoods in and around Miami, quick tips for how to move a house faster, ideas for a less painful move or open house prep and of course, a few must-see listings. My goal is to help you, even if we aren’t in direct contact, and I’d love to hear from you with any questions.