Your monthly mortgage payment – how much goes to home ownership?

What you can afford when contemplating a home purchase depends on far more than the price of the home.

 

With today’s interest rates, more of the base payment goes toward the principal owed on the home than it did in years past. However, in the early years of your loan, it’s still significant. But principal and interest aren’t the only factors added in to the monthly cost of owning a home.

 

Start with taxes. Depending upon where you choose to live and the price of your home, property taxes could add several hundred or even a thousand dollars to the price of your home. Here in Tamaqua you’ll typically pay about $240 in property taxes on a home priced at $150,000.

 

When you view a home listing you’ll learn how much the current owners are paying in property taxes. Is that the same rate you’ll pay, or are they either locked in to a lower rate or receiving the benefit of a senior discount or other program? Ask your agent to do the research and find out.

Then there’s insurance. Again, depending upon where you choose to live and the risk factor involved, insurance could run into the hundreds per month. Once you’ve chosen an area and found homes to view, the listing should tell you what the current owners are paying. Again, they could be receiving a discount for insuring multiple properties, etc. so find out what you’ll pay.

 

As you’re choosing areas to explore for your future home, consider whether flood insurance will be needed. Flood plain maps will tell you.  

 

Next, is the home you want covered by a homeowners association? If so, you need to look at the monthly fees. Do they cover everything, or are there likely to be special assessments when improvements need to be made to the common areas?

 

Finally, consider mortgage insurance. If you’re paying less than 20% down, you’ll pay mortgage insurance, whether yours is a conventional or FHA loan. Rates, which vary between 0.3% to about 1.5% per year, will depend upon your credit score and the size of your down payment.

 

The mortgage insurance will drop from a conventional loan once your loan balance drops below 80% of the purchase price. Mortgage insurance on a FHA loan is there to stay, so it’s definitely a factor to consider.

 

When you go through the pre-approval process, ask your lender what rate you can expect to pay for mortgage insurance.

 

It’s not in your payment, but don’t forget the cost of home maintenance.

The larger the home and the more amenities it has, the more maintenance will be required. Will you mow those lawns, wash those windows, clean that pool, or plow that snow yourself - or will you need to hire someone?

When you're ready to go shopping, call me! I'll be glad to show you what's available in the price range you and your lender decide upon.

Your Tamaqua Home for Sale is Beautifully Decorated. Do You Really Need Staging?

Your Tamaqua home is beautiful – whether you hired a professional decorator or have decorating skills yourself, it is a work of art. It perfectly reflects you, your tastes, and your personality. There’s no clutter, everything is in good repair, and the paint is fresh. You are rightfully proud of your home.

 

Now that it’s for sale, your agent is recommending staging.

 

Why?

 

Because you are not the buyer.

 

The truth is, potential buyers may not share your taste, so your decorating might be a hindrance rather than a help in selling.

 

Stagers are skilled in presenting a home to appeal to a wide variety of buyers. They de-personalize and “neutralize” the décor so potential buyers can visualize themselves and their own furnishings in the house. They choose and arrange furnishings and art work to produce a "feeling" without drawing attention to themselves. If your rooms feel crowded, they’ll advise you to remove a few select items.

 

Part of this process is the removal of personal items that take attention away from the house. You as a seller want potential buyers to focus on the house and how it exactly suits their wants and needs. Your photos, trophies, awards, or collections are distractions that can cause a buyer to pass up a house they'd love, simply because they didn't "see" all the features and benefits.

 

I’ve seen potential buyers focus on photographs, looking to see if they know any of the people and commenting on the activities pictured. I’ve also seen them become so interested in art work or collections that they barely noticed the home’s features. Note that these were only potential buyers. They all chose other homes.

 

In addition, stagers know how to place focus on a home's most appealing or useful features and benefits, while showing potential buyers the possible uses for each space. 

 

The bottom line: Just because your Tamaqua home has been carefully decorated doesn't mean it is ready to go on the market.

 

Consider hiring a professional stager – because that could be just what you need to get a fast sale for top dollar.

 

And of course, when you're ready to go on the market, I'd love for you to call me again. I'll be glad to show you my marketing plan and explain what I'll do to get your home sold in record time.

Should you worry about that?

Is now a good time to invest in a new Tamaqua home – or does investment value matter?

While your home can become one of your largest assets, should you look at your purchase as merely an investment?

 

In the years since the “housing boom and bust,” the idea of a home as an investment has come more to the forefront. Some are looking harder at the possible appreciation than the more emotional aspects of owning a home.

 

Now, as home prices have risen and the economy is doing well, some experts are predicting that another bubble is growing and that like all bubbles, it will burst. Others are saying prices will level off and there will be no appreciation for a few years.

Should it cause you to postpone purchasing a home here in Tamaqua?

 

If you plan to move again in the near future, then considering short term appreciation is wise. In fact, remaining a renter might be the wisest move of all if you plan to sell within 2 or 3 years. Selling does come with costs.

 

If your goal is to set down roots, become part of a community, and enjoy the benefits of being King or Queen of your castle, then how your new home might fluctuate in value over the next few years shouldn’t be a factor in your decision.

 

After all, if it isn’t for sale, its value in the marketplace has no bearing on anything except possibly your net worth sheet. Great-grandmother’s antique Cameo might be worth a fortune, but if you aren’t going to sell it, its worth is only sentimental.

 

What should you consider when you’re deciding whether now is the time for you to become a homeowner?

• Do I plan to stay in this community for at least the next 4 or 5 years?
• Can I find a home I'll enjoy living in for the next several years?
• Will my credit scores allow me to take advantage of today's low interest rates on a fixed-rate mortgage?
• Will the payments on that home fit comfortably into my budget, so that I can continue to enjoy my favorite activities?

If you’re thinking of owning a home, your first step should be to contact a lender and become pre-approved (not pre-qualified) for a home mortgage loan.

 

This will tell you how much you can afford to spend based on your income, your down payment funds, the interest rate you’ll qualify for, and your other obligations.

 

Please do note that your lender may say you “can” spend more than you should spend.

 

He or she doesn’t know about the other things in life that may be important to you, such as sending the kids to a private school, taking an annual vacation, or even attending concerts regularly. Only you know the size of the payment that will fit comfortably into your life.

 

If you need a lender recommendation, get in touch. I can give you the names of several lenders who have served my clients well.  And when you’re ready to begin the search, please get in touch again. I’d love to help you find that “just right” Tamaqua home.

Must I - or may I – leave this with the house?

The issue of what stays with a house after closing can become a problem if buyers and sellers are operating under opposite assumptions. In extreme cases, it can even lead to legal action.

 

The rule of thumb is that anything that’s part of the real property should stay with the house. Everything else, with the exception of items named in the listing agreement and addressed in the purchase and sale agreement, should go.

 

What is real property? Anything attached permanently to the house. This would include light fixtures, curtain and drapery rods, cabinetry, and towel bars. If removal would do damage to the house, then it needs to stay.

 

If you have items that will be considered real property and you don’t want to leave them behind when you sell your home, replace them before the first buyer tours the house. Your dining room might show better with Grandma’s antique chandelier, but replace it anyway.

 

I’ve heard of transactions falling apart during negotiations because of a dispute over light fixtures, a medicine cabinet, and even a wooden gate that had been excluded from the listing. If the buyers had never seen it, they wouldn’t have asked for it.

 

Kitchen appliances are generally addressed in the purchase and sale agreement, but even those can become a problem. If the agreement says the range and refrigerator stay, then the buyers naturally assume that the appliances in the house when they wrote the offer will be the appliances they find after closing. And yet, that isn’t always the case. Sellers have been known to remove their new, top-of-the-line appliances and replace them with older, less expensive models just prior to moving out. Describing them by make and model in the purchase agreement would eliminate the problem.

 

Some items might go either way. For instance, a porch swing. The buyers might assume it stays, but the sellers might assume it goes. The swing is not actually attached to the house – it is merely hanging from chains that are hung on hooks attached to the house. Would removing it do damage? No, it would just leave empty hooks. Such items should be addressed, in writing, as part of the purchase agreement.

 

What if the seller wants to leave things “to be nice?”

Some things, such as cans of touch-up paint, labeled with the rooms where they were used, might be welcomed and might not. Ask before you leave them behind.

 

Sellers have been known to leave unwanted furniture, broken appliances, and even food in the refrigerator. All these do is cause work and expense for the buyers – and leave them with a sour taste and bad feelings toward the seller.

 

The rule for sellers: Leave everything that’s considered real property. Then, before you leave anything that isn’t permanently attached to the house or addressed in the purchase and sale agreement, ask if the buyers want it. If the answer is no, take it away.

 

THE EXCEPTION: Please don’t take the toilet paper off the holders or the light bulbs out of the fixtures. That’s just rude. And... if you've met the buyers and know they would appreciate bottled water, soft drinks, or a bottle of wine, you can leave those in the refrigerator with a nice note.

 

The rule for buyers: If you want something to stay, and it isn’t real property, address it in your offer.