June is National Homeownership Month!

Jump on the bandwagon and follow these steps to become a first time homeowner!

Start by getting a pre-approval letter.  Pre-approval letters are very important because:

  • Your Realtor knows you’re serious when you present a pre-approval letter.
  • Sellers prefer to negotiate with prospective buyers with pre-approvals over simple pre-qualification letters – often times sellers won’t even consider your offer without a pre-approval letter from a licensed mortgage loan originator!
  • Your mortgage pre-approval letter takes into consideration down payment percentages, interest rates, property taxes and mortgage insurance – which makes it clearer to you (the buyer) just how much you can truly afford to borrow.
  • A solid pre-approval will help you get your loan processed faster. Getting a pre-approval could take your offer from a 60 day closing to as little as 30 days.

Pre-Approvals are Not Pre-Qualifications

Pre-qualifications will give you an idea of what kind of loan you may qualify for and can typically be completed in minutes. This informal estimate may be just fine for those in the very early stages of the home buying process.

Pre-approvals are more involved and are a better indication of your ability to fully qualify for a mortgage loan. In order to get pre-approved, we will gather all the information we need to begin the loan process. This typically involves a credit check as well as income and asset verification. Typical documents required for a pre-approval include:

  • Bank statements
  • W-2s
  • Drivers License/Identification
  • Paystubs
  • Proof of IRAs or retirement accounts and their balances

Apply Online for Your Pre-Approval

Securely submit  your application online!

What are the Benefits of Homeownership?

Increasing Cost of Rent

Home buyers typically enjoy fixed housing expenses. Renters are consistently asked to cough up more money each year. According to the Census Bureau, median rent prices in 1988 were $350. In 2000, median rent prices approached $500 per month.  Currently, the median asking rent in the United States is $717 per month. The KCM Crew discusses the rising cost of rent in their blog post .

Building Home Equity

When you pay a mortgage, a portion of that payment goes directly toward building equity in your home. When you pay rent, you will never see that money again. It’s important to note that home equity takes time to build and during the early years of a mortgage, payments go primarily to the interest on the loan.  However, the sooner you purchase a home, the sooner you will begin to reap the benefits of a reduced principal balance and higher equity.

Social Benefits

According to the National Association of Realtors®, research has shown that homeownership brings substantial benefits for families, communities and the country as a whole. Some of the documented social benefits to consider in your decision to buy or rent include:

  • Increased charitable activity
  • Civic participation in both local community and national issues (including voting)
  • Greater awareness of the political process
  • Higher incidence of membership in voluntary organizations and church attendance
  • Greater social capital generated
  • Greater attachment to the neighborhood and neighbors
  • Lower teen pregnancy by children’s living in owned homes
  • Higher student test scores by children’s living in owned homes
  • Higher rate of high school graduation thereby higher earnings
  • Children more likely to participate in organized activities and have less television screen time
  • Homeowners take on a greater responsibility such as home maintenance and acquiring the financial skills to handle mortgage payments and those skills transfer to their children
  • Homeowners reported higher life satisfaction, higher self-esteem, happiness, and higher perceived control over their lives
  • Better health outcomes, better physical and psychological health
  • Tremendous wealth gains for homeowners under normal housing market conditions (outside of the terrible bubble/bust housing years)
  • Homeowners not only experience a significant increase in housing satisfaction, but also obtain a higher satisfaction even in the same home in which they resided as renters
  • Family financial situation and housing tenure during childhood and adulthood, impacted one’s self-rated health (in particular, the socioeconomic disadvantaged indicated by not being able to save any money or not owning  or purchasing a home are less likely to self-rate their health as excellent or very good).
  • Less likely to become crime victims
  • Homeowners better maintain their homes, and high quality structures also raise mental health -renter-occupied housing appreciates less than owner-occupied housing
  • Housing prices are higher in high-ownership neighborhoods
  • Maintenance behavior of individual homeowners is influenced by those of their neighbors

The benefits of homeownership are endless.  If you are ready to take that next step into becoming a homeowner, contact me today!

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