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Six Signs That You're Ready To Buy
 Figuring out whether you're ready to buy a house -- whether you're a renter or are aiming to move up or size down -- can be a daunting task. But there are signs that will indicate whether you're ready to take the buying plunge.
If you are thinking about buying, you're not alone.
David Lereah, NAR's chief economist, said the housing market has reached a new plateau. "Over the last few years, it's become apparent that the level of home sales will generally remain at higher levels than what was common in the mid-1990s," he said. "The fundamental change is a growing population with a rising number of households entering the age in which people typically buy their first home. In short, we have the need, desire and ability for people to buy homes."
So are you ready to make the move? You might be if you:
Are familiar with the market. If you've been paying attention to how much houses are listed for in the neighborhoods you're eyeing and have a realistic view of how much a house will cost you, you're in good shape. But if you're dreaming about that big corner house with no clue about it's asking price, you may want to spend some more time becoming familiar with the market and how much houses are going for.
Have the money for a down payment and closing costs. The down payment is a percentage of the value of the property. Freddie Mac says the percentage will be determined by the type of mortgage you select. Down payments usually range from 3 to 20 percent of the property value. Also, you may be required to have Private Mortgage Insurance (PMI or MI) if your down payment is less than 20 percent. Closing costs include points, taxes, title insurance, financing costs and items that must be prepaid or escrowed and other settlement costs. Generally, buyers will receive an estimate of these costs from your lender after you apply for a mortgage.
Know how much you can afford. Freddie Mac says that as a general guide, your monthly mortgage payment should be less than or equal to a percentage of your income, usually about a quarter of your gross monthly income. Also, your income, debt and credit history go into determining how much you can borrow. As a general rule, your debt -credit card bills, car loans, housing expenses, alimony and child support -- should not be more than about 30 to 40 percent of your gross income.
Know what additional expenses will come with owning a home. This includes homeowners insurance, utility bills, maintenance costs -- roofing, plumbing, heating and cooling.
Have your credit in good shape and make sure your credit report is accurate. Potential lenders will view your credit history -- how much debt you've accrued, how many accounts you have open, whether your payments are made on time, etc. -- to determine whether they'll give you a loan. You should get a report from each of the three credit reporting companies: Equifax, Experian, and Trans Union.
You haven't made any recent major purchases, particularly a vehicle. If you do, you may have a harder time getting a loan -- or it could potentially lower the amount you'll be approved for.
Once you decide you're ready, you'll need to be prepared to move quickly if you're aiming to buy in a sellers' market.
The next steps involve hiring a real estate professional and getting preapproved for a mortgage loan. This way you'll know if you can get approved and how much you can spend on a house. It also puts you in a stronger position when you ultimately make an offer on a house.
Written by Michele Dawson
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Buying Services for Atlanta Home Buyers
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Congratulations! You have decided to purchase a home, or are thinking about buying one. You'll be joining the ranks of hundreds of families who realize that home ownership offers a number of benefits including building equity, saving for the future, and creating an environment for your family. When you own your own home, your hard-earned dollars contribute to your mortgage. The equity you earn is yours. Over time, your home will increase in value.
In the following reports, you'll find the information you need to make a wise buying decision. We'll take you through the planning process step-by-step , to help you determine which home is right for you. You'll find a host of informative articles on mortgages, viewing homes, the offer, closing details and moving.
Please contact me if you have any questions about buying a home in Atlanta or elsewhere in Georgia. |
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Federal Real Estate and Mortgage Tax Incentives
 What's the mortgage interest deduction worth to the typical homeowner who claims it at tax time? Nearly $10,000 on average, according to a provocative new analysis of federal incentives for homeowners nationwide.
But there are many parts of the country where the "typical" tax deduction for mortgage interest is far bigger, and plenty of others where it is considerably smaller. Take, for example, California's 14th congressional district in and around high-cost Silicon Valley. The average taxpayer there took a whopping $35,000 in mortgage interest deductions during the year covered by the research -- more than six times the average mortgage interest writeoff taken during the same period by residents of Oklahoma ($5,710).
The homeowners of the 14th district took an aggregate $3.2 billion worth of mortgage interest deductions and that total was about the same as all the mortgage interest writeoffs claimed by all the homeowners in seven states -- Alaska, Montana, North and South Dakota, Vermont, West Virginia and Wyoming -- combined.
The new research study by the National Association of Home Builders used the latest available IRS tax data -- tax year 2003 -- and broke deductions down by the state and congressional districts of the taxpayers. The report was prepared in part to demonstrate the size and economic importance of the mortgage interest and real property tax writeoffs to individual congressional representatives.
To illustrate: Confronted with the $3.2 billion writeoffs taken by 14th district constituents in a single year, any savvy congressman would be loath to cut back on the deduction, even to reduce the federal deficit.
In tax year 2006, according to estimates by Congress's joint committee on taxation, homeowners will claim a total of $81 billion in mortgage interest deductions. By 2009, the writeoffs are expected to hit $100 billion a year. The deduction is available on all qualifying principal residences where the mortgage amount does not exceed $1 million and home equity debt does not exceed $100,000. As a practical matter, homeowners can write off interest annually on home mortgage debt totaling $1.1 million.
They can also write off local real property taxes paid on a principal residence during the tax year without limit. In 2006, according to congressional estimates, $15 billion in "local real" will be deducted by homeowners.
The highest property tax deductions, not surprisingly, go to homeowners in high tax areas, especially in the northeastern states. For example, the residents of New York's 3rd congressional district on Long Island, took an average $11,884 in property tax writeoffs during 2003, a total of $1.25 billion for the district. That aggregate writeoff was more than all the property tax deductions taken in 2003 by homeowners in eight states combined -- Wyoming, West Virginia, Hawaii, the District of Columbia, Delaware, South and North Dakota and Arkansas. (For federal tax purposes, the study treated D.C. as the equivalent of a state.)
The NAHB research found that the highest states for property tax writeoffs were New Jersey (an average $6,005 per homeowner), New York ($5,187), New Hampshire ($4,830), Illinois ($4,129) and Vermont ($3,845). The highest states for mortgage interest writeoffs on average were California ($14,217), Hawaii ($12,766), the District of Columbia ($11,759), Nevada ($11,522) and Washington ($11,223).
The lowest states for mortgage interest deductions were Oklahoma ($5,710), Iowa ($6,754), North Carolina ($6,808) and Maine ($6,888).
Jerry Howard, executive vice president and CEO of NAHB, said, "The report shows that millions of working families around the nation use and depend upon these important tax incentives to help them maintain their current standard of living. Because the mortgage interest and real estate deductions significantly reduce federal tax liabilities for homeowners, they are important tools for promoting homeownership."
The not-so-subtle message to Congress from NAHB: Don't mess with these writeoffs. They're too important to the people who elected you … and can throw you out of office if you cut their deductions.
Written by Kenneth R. Harney
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Credit Agencies
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There are 3 credit agenies in the U. S. You are entitled to two free credit reports a year from each agency in Georgia.
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 Last Week in the News
Inman News
Freddie Mac is the latest group tracking loan prices to report that rates on 30-year fixed-rate mortgages have fallen below the 6 percent threshold.
The McLean, Va.-based mortgage repurchaser's weekly Primary Mortgage Market Survey showed borrowers paying an average of 5.96 percent interest with 0.4 points for a 30-year fixed-rate mortgage during the week ending Dec. 6. That's down from 6.1 percent the previous week, and has not been lower since the last week of September, 2005, when it averaged 5.91 percent.
Lower housing prices, personal spending and income are factors pushing mortgage rates down, according to Freddie Mac's chief economist, Frank Nothaft.
“With lower consumer spending and personal income gains in October, interest rates on U.S. Treasury securities fell lower this week and mortgage rates followed," Nothaft said in a press release. He said the federal funds futures market has priced in "almost a 100 percent probability" that the Fed will lower rates at its Dec. 11 policy committee meeting.
Although fixed-rate mortgage rates are not directly tied to the federal funds rate or Treasurys, "These combined factors will likely diminish upward pressures on mortgage rates over the next few months,” Nothaft said.
The Mortgage Bankers Association on Wednesday reported an average 5.82 percent rate for a similar loan with an average of 1.07 points for the week ending Nov. 30 (see Inman News story for other rates from in the MBA survey).
Freddie Mac reported that rates on 15-year fixed-rate mortgage this week averaged 5.65 percent with an average 0.5 point, down from 5.73 percent last week and the lowest rate since the second week of October, 2005 average of 5.62 percent.
Five-year hybrid adjustable-rate mortgages (ARMs) indexed to Treasurys averaged 5.75 percent with an average of 0.5 point, down from 5.86 percent a week ago and the best rate since the week ending Oct. 27, 2005, of 5.63 percent.
One-year Treasury-indexed ARMs averaged 5.46 percent with an average 0.6 point, up from 5.43 percent last week, which was also the average rate this time last year. |
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