Saving for a Home?
Saving For a Home?
Everyone wants to save up a large down payment when purchasing a home. Yet, when prices are on the rise, saving quickly enough to keep pace with rising interest rates and property values can be extremely difficult. In times such as these, why not let the market build equity for you instead?
Owning a home in an appreciating market can build equity faster than most people can save. For example, a $200,000 home that appreciates by 6% gains $1,000 per month in equity. In this article by Consumer Affairs, home prices continue to edge up.
Getting Ahead of Rising Prices and Rates
Purchasing a home with a small down payment usually means that you’ll be required to pay mortgage insurance (MI or PMI). Click here to learn more about mortgage insurance. Your total monthly payment will be higher; however, the cost of mortgage insurance today can be a lot less expensive than buying a more expensive home at a potentially higher rate tomorrow. It pays to view mortgage insurance as a means to an end. In all likelihood, it will be a temporary cost, which may pay for itself over and over again.
Is a Down Payment Always Needed?
If you live in a rural area, you might even be able to purchase a home using a USDA no down payment mortgage loan. Property and income restrictions apply with USDA loans – please contact a loan officer to see if you qualify.
In addition to USDA loans, VA loans also require no down payment. VA loans are available to eligible veterans only. Learn more about VA loan eligibility requirements on the VA website.
Diverting Rent Payments to Equity
If you’re currently renting, chances are good your monthly expense is already similar to a mortgage payment. When you consider that part of your payment is a reduction of the mortgage’s principal balance, the real net cost can be far less.
Using Appreciation to Your Advantage
While you’re saving to buy, appreciation (or rising home value) works against you. After you’ve purchased your home, rising value works with you to build equity and may even mean you can eliminate cost or mortgage insurance more quickly.
Earning Tax Advantages
Many homeowners enjoy income tax savings based on the mortgage interest and real estate taxes they pay each year. Talk to your tax professional to see if tax advantages may reduce the actual cost of owning for you too.
Contact a licensed Inlanta Mortgage loan officer to discuss what would benefit you more – buying now or saving for a later purchase. Use our branch locator to find a loan officer near you.
About Inlanta Mortgage
Headquartered in Brookfield, Wisconsin, Inlanta Mortgage is a growing mortgage banking firm committed to quality mortgage lending, ethical operations and strong customer service.
Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as a full suite of jumbo and portfolio programs. The company is an agency approved lender for Freddie Mac and Fannie Mae, FHA/VA, FHA 203K and USDA. Inlanta Mortgage also offers numerous state bond agency programs. Review Inlanta’s mortgage loan programs.
Inlanta Mortgage was recently named a Top Workplace for a third time in 2015. Inlanta has also received the Platinum Million Dollar USDA Lender Award and has been recognized as a Top Mortgage Employer by National Mortgage Professional and a Top 100 Mortgage Banking Company and 100 Best Mortgage Companies to Work For by Mortgage Executive Magazine.
Inlanta Mortgage, Inc. NMLS #1016