Big Move! Planning for Relocation

In many areas today, rents are rising faster than home prices. In such situations, it often makes more sense to own a home than to rent someplace to live. Even when renting and owning seem like a wash, owning can still come out ahead.

 Consider these facts as you look at buying a home in 2017:

• Don't forget how the mortgage interest you're paying will likely benefit you at tax time. (Consult with a tax advisor for details specific to your situation.)
• If you plan to live in the same place for a length of time, your home is likely to appreciate so that at sale time, you'll find yourself with a gain, or at least break even in many cases.
• Buying gives you a home that you're free to customize as you wish, while also giving you a place to put down roots and get involved in the community.
• Depending on the financing you choose for your home purchase, your monthly home mortgage amount may be fixed from 15 to 30 years, allowing you to budget for other expenses more easily.
• Renting puts money in the pockets of your landlord while paying off a mortgage results in a home paid off, and resulting in no more monthly mortgage/housing payments.

Consult with a local mortgage professional (contact us for recommendations) to get preapproved for a mortgage. Then let's talk about home shopping!

 We all know that you'll pay less interest if you take out a 15-year fixed-rate loan as opposed to a 30-year fixed-rate loan. But can you go even lower with your mortgage loan's term? By taking out a mortgage with a shorter term than 15 years, you could save even more in interest payments.

Consider the 10-year fixed-rate mortgage. The monthly payments will be higher with this type of loan—because you are stretching your payments out over a shorter time period - but you'll pay even less interest over the life of your loan than you would with a 15-year fixed-rate loan.

Say you borrow $180,000 from your mortgage lender in the form of a 15-year fixed-rate mortgage with an interest rate of 3.49%. Your monthly payment, not including taxes and insurance, will be about $1,285 and you'll pay a total of about $51,000 in interest if you take the full 15 years to pay off this loan.

Now, say you borrow that same $180,000 but in the form of a 10-year fixed-rate mortgage with an interest rate of 3.08%. Your monthly payment will jump, all the way to about $1,744, again not including insurance and taxes. But the total interest you'll pay over the life of this loan will fall to just about more than $29,000.

Is a 10-year loan right for you? It depends on whether you can afford the higher monthly payment and how long you expect to live in your home. Your best bet is to talk with a knowledgeable mortgage lender—like us!—to determine which loan type is best for you and your financial situation. We would be happy to help you.  Reach out to t4homes@gmail.com