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Homeownership Has Its Benefits

10 Benefits of Owning Your Own Home

Homeownership is a rite of passage many of us dream of. Owning a home means putting down roots and having a space that is truly yours. It’s a significant moment of your life when you finally own a home.


But owning a home can be daunting because of the responsibilities and obligations that come with it, combined with the initial process it takes to get there. When done properly, though, buying and owning a home is a process that limits your financial risk, increases your investment power, and saves you tons of money over the long term—and it can even save you money immediately.

 

Renting has little to no ROI. Renters don’t have to worry about maintaining a residence or paying the mortgage. But if you’ve been renting long term, chances are you’re already performing home maintenance on some level and you’re at your landlord’s mercy when it comes to major repairs. And when it comes to paying the mortgage, there are many advantages over rental payments, which don’t provide any return on investment beyond securing a place to live through the end of the month or lease.

 

How much is rent actually costing you? Consider the amount one pays over a 10-year period. A $2500/month rental payment adds up quickly to a whopping $300,000 over 10 years, when the same amount of money could have gone toward reducing 1/3 of the debt on a 30-year home mortgage by essentially making the payments to yourself instead of a landlord. Wow!

Here are 9 more benefits to owning your own home:

1. Homeownership is an investment. Unlike a car and many other purchases that decrease in value, a home is a purchase that appreciates over time. While each local market has its own unique factors, the national median home price goes up each year, even in times of recession. As you pay your mortgage each month, your debt amount goes down, while the value of your home continues to rise. This creates the buying and reinvestment power better known as equity.

 

2. Gain equity. When it comes to homeownership, investment and equity are directly related. As you make mortgage payments each month, part of the payment goes toward the interest, while the rest pays down the principal balance. Equity can be better defined as the part of the principal balance you’ve already paid, or the percentage of your home you already own. Paying the principal is like depositing money in the bank, because that money becomes available for reinvestment in the home itself or a new home.

 

3. Take advantage of tax benefits. The federal government encourages homeownership (which in turn encourages economic growth) by offering tax incentives for homeowners. The biggest one is the option to deduct interest from mortgage payments on your income tax return, especially at the start of a mortgage when most of the payment is applied to the interest. Payments on private mortgage insurance (PMI) and certain home-related purchases also qualify for tax benefits.

 

4. Stabilize your housing costs. A fixed-rate mortgage means you’ll have the same mortgage payment for the term of the loan (usually 30 years), while monthly rental payments will continue to climb. And even adjustable-rate mortgages (ARM) have a fixed cap on them. Homeownership also stabilizes other home-related expenses like utilities and gives you more control over your ability to make investments in your property that keep those expenses down.

 

5. Gain control over your living space. Renting doesn’t usually come with a lot of options for modifying your living space to better suit your needs. Renters with changing needs must also deal with changing residences. Homeownership means you can make improvements to your home, and home improvements usually lead to increased home value, both financially and in daily home life. The power of equity can give homeowners the extra financing they need to reinvest in their homes when cash funds aren’t an option.

 

6. Increase your own sustainability. Homeownership can help you create a sustainable future in many different ways. Long-term renters lack sustainability because a high percentage of their income usually goes toward housing expenses that are constantly increasing. Locking yourself into a mortgage payment helps level out living expenses, so when income goes up it can be budgeted elsewhere. Paying off a mortgage allows homeowners a long-term plan to significantly reduce their living expenses as they move toward a retirement budget.

 

7. Stop moving. Homeownership increases sustainability and stability. Moving from rental to rental is a major inconvenience and a financial and emotional burden. Renting can mean that you never really know where you’ll be living next or what your expenses will be. Staying in the same home allows a financial and emotional investment in both your living space and your community.

 

8. Social benefits. Staying put for longer periods of time also creates social benefits that range from friendships with neighbors to community involvement and consistent educational opportunities for children.

 

9. Use your investment to make another investment. The equity that comes from paying a mortgage is what allows many individuals and families to make future investments in the same home, a higher-valued home, or second home. A home equity line of credit helps homeowners use the part of their home that’s already paid off to obtain financing for investments apart from the home itself, such as purchasing a boat or RV.

Homeownership comes with a bevy of benefits; these are only a handful. What other benefits have you experienced with homeownership? What makes you want to own your own home?

 

Posted on October 29, 2019 at 3:19 AM
Carlos Camargo | Category: Buying a House, Fair Housing, First-time Buyer, Investment Property, Newsletter-CFC, Real Estate Market Update

Statewide Rent Control and Just Cause Eviction Bill Approved by the California Legislature

Statewide Rent Control and Just Cause Eviction Bill Approved by the California Legislature
The California Legislature recently approved Assembly Bill 1482 — a statewide rent control and just cause eviction bill. Although not yet law, Governor Newsome is expected to sign the bill. Some of its major provisions include:
  • Rent Cap. A cap on annual rent increases set at 5% plus inflation, up to a maximum of 10% per year.This cap applies retroactively to all rent increases since March 15, 2019.Any rent increases initiated on or after that date will count toward the rent cap, and if over the maximum, will have to be rolled back effective January 1, 2020.
  • Just Cause. A prohibition on evictions without “just cause.”Landlords can no longer terminate month-to-month tenancies at will and may now only evict tenants for one of 15 specific reasons. The permissible reasons are divided into two categories: “at fault” and “no fault.”
    • “At fault” termination is generally allowed when tenants have breached their lease and does not require the payment of relocation assistance. “At fault” reasons include non-payment of rent, nuisance, criminal activity, refusal to allow entry, and breach of a material term of the lease.
    • “No fault” termination is allowed even when the tenant has not breached the lease and will require the landlord to pay one month’s rent in relocation assistance. “No fault” reasons include an owner or family member intending to occupy the property, withdrawal from the rental market, substantial remodeling and compliance with a government order to vacate the property,
  • Exemptions. The bill’s just cause eviction provisions only protect tenants who have been in possession for a year or more.  Certain types of housing are exempt including:
  • Single family homes and condos if:
    • Tenants have received notice of the exemption and,
    • The owner is not a REIT, corporation, or LLC owned wholly or in part by a corporation
  • Homes built within the last 15 years
  • Owner-occupied duplexes
  • Owner-occupied single-family homes where two or fewer rooms are rented out (exempt from just cause but not rent cap)
  • Government assisted housing

Posted on September 20, 2019 at 3:32 PM
Carlos Camargo | Category: Fair Housing, Investment Property, N.A.R. - C.A.R. Update, Real Estate Market Update

Selling is Essentially a Transfer of Feelings: The everything guide to selling a first home

A famous salesman once said that selling is essentially a transfer of feelings.

Most people love and cherish their home. Homeowners want the next owner to fall in love with it, too—through photos, words, and the experience of walking in the front door. But, perhaps most, sellers want the right asking price.

This isn’t a small task. Selling a home requires work. It requires time. The journey isn’t always easy. There will be frustrations. But when a homeowner can seal the deal and move on to the next chapter — wow, what a blissful feeling that is.

Know exactly what is desired First things first:

Know what is wanted (and what your partner wants) in order to sell a home with minimum frustration. Why is the move necessary? What are the expectations from the process? When should the ‘For Sale’ sign be placed in the yard? Unless the home was purchase last week, the housing market changed since you became a homeowner. Mortgage rates fluctuate, inventory shifts over time— these are just a few of the factors that affect the state of the market, and every market is unique. Become educated on what to expect.

Interview and select an agent

This is the most important relationship on the home-selling journey. Pick the right agent and there’s a good chance of receiving the better sales price for the house.

Pricing the home

How much is the home worth? That’s the…$300,000 question. Whatever the number, you need to know it. This is how an agent will help pinpoint the price.

Prep and market the home for selling

The best-marketed homes have beautiful photos and compelling property descriptions, so they can receive likes — which can amount to buyer interest on social media. Some agents even use videos, virtual tours, texts, and audio messages.

Showcase the home

One of the best ways to get buyers in the door is to have an open house. This is the chance to show off a home’s best assets, and help buyers envision themselves living there. Know how your agent will organize, advertise and host the event to ensure it’s a success.

Negotiate home inspection repairs

Most purchase agreements are contingent on a home inspection (plus an appraisal, which will be managed by the buyer’s lender). This gives the buyer the ability to inspect the home from top to bottom and request repairs — some even could be required per building codes. The upshot: You have some room to negotiate, including about certain repairs.

Close the Sale

Settlement, or closing, is the last step in the home-selling process. This is where the final paperwork is signed, the whole process becomes official and the seller collects their check. Before that can happen though, you’ll have to prepare your home for the buyer’s final walk-through and troubleshoot any last-minute issues.

 

Posted on January 30, 2019 at 3:34 AM
Carlos Camargo | Category: Fair Housing, Selling a House

Racial Progress Over the Last 50 Years: MLK & Fair Housing

Fair Housing and Racial Integration

In 1963, Dr. Martin Luther King, Jr., shared with the world his dream of a colorblind society — one that focuses on his children’s character, not on their complexion. America has certainly come closer to realizing Dr. King’s vision. But segregation and discrimination continue to persist.

Views on systemic racism also differ sharply across racial lines. According to a survey by the Pew Research Center, 92 percent of blacks said that “whites benefit a great deal or a fair amount from advantages that blacks do not have.” In contrast, only 46 percent of whites agreed with that statement.

Nonetheless, it’s important to recognize the racial harmony we’ve achieved — in our workplaces, in our schools, in our voting booths. To that end, WalletHub measured the gaps between blacks and whites across 23 key indicators of equality and integration in each of the 50 states and the District of Columbia. 

50th Anniversary of Fair Housing Commemoration Video: https://lnkd.in/gZpupXK || In 2018, the National Association of REALTORS® will join with our partners and allies to commemorate the 50th Anniversary of the Fair Housing Act. The commemoration will focus on these main elements:

  • Understanding how we as a nation are constantly improving our commitment to fair housing and property rights by acknowledging our history and recognizing champions for fair housing. (January – March 2018)
  • Commemorating the passage of the Fair Housing Act and actions to realize the promise of the law. (April – May 2018)
  • Embracing our role in the forefront of advancing fair housing and leading efforts to address community fair housing issues. (June – December 2018)


Fair Housing: Promises of a Century

With Martin Luther King, Jr. Day around the corner and 92 percent of blacks saying whites benefit a great deal or a fair amount from advantages not available to blacks – versus 46 percent of whites who agreed with that statement – the personal-finance website WalletHub conducted an in-depth analysis of 2018’s States with the Most Racial Progress.

To measure America’s progress in harmonizing racial groups, WalletHub measured the gaps between blacks and whites across 23 key indicators of equality and integration in each of the 50 states and the District of Columbia. The data set ranges from median annual income to standardized-test scores to voter turnout.

This report examines the differences between only blacks and whites in light of the high-profile police-brutality incidents that sparked the Black Lives Matter movement and the holiday honoring Dr. Martin Luther King, Jr., who played a prominent role in the Civil Rights Movement to end segregation and discrimination against blacks.

 

Fair Housing: Promises of a Century

Posted on January 10, 2018 at 7:13 PM
Carlos Camargo | Category: Fair Housing