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Benefits of Owning a Home

Benefits of Owning a Home

Are you thinking of buying your first home? You’re not alone, home sales in the Austin area have climbed year after year and 2018 looks like another good year for real estate. 

Owning a home is not an easy decision to make. After all, when you rent from someone else, it’s the landlord that takes care of any issues as they arise. You can move to another area of town or even to another city when your lease is up. Yet at some point you begin to realize that you’re missing out by now owning your own home. You can run the numbers and compare renting vs. buying but there are other benefits beyond the math. Here are just a few-

Perhaps the first thing you’ll notice when you own your first home is the pride of ownership. The home belongs to you and no one else. As home values increase, the equity belongs to you, not your landlord. When you drive away from your home each morning to go to work, the house you see belongs to you and you only.

You have control over how the home looks as well. Want a more vibrant entryway? A bold color in the hallway? New lighting in the dining room? You get to choose how the home looks and nothing really limits you other than your budget. How about a swimming pool in your backyard? Want a new deck? How about landscaping? Having the control over what your home looks like and the amenities that go along with it is a major benefit owning your own home.

In addition to having the control over your property, you also now belong to the community. You’re in a neighborhood now and you’re a member of the community. You no longer need to worry about renewing a lease or moving to another apartment building or having your rent raised each time you move. These advantages are just a few non-financial benefits owning your own home.

Mortgage Rates Are Rising. Here’s What You Can Do to Soften the Blow

Mortgage Rates Are Rising. Here’s What You Can Do to Soften the Blow

In the market for a new home? With mortgage rates rising, you may want to consider a mortgage rate lock.

What is a mortgage rate lock?

A rate lock freezes an interest rate on a mortgage for a period of time. The lender guarantees (with a few exceptions) that the mortgage rate offered will remain available  for a specific amount of time. This means you don’t have to worry if rates go up between the time you submit an offer and close on the house.

Mortgage rate locks typically last from 30 to 60 days, though they can also last 120 days or more. Some lenders may offer a free rate lock for a specified amount of time. After that, however, the lender may charge fees for extending the lock.

When to lock in a mortgage rate

You can’t lock in a rate until after the initial loan approval. However, many borrowers wait until they have found a home to purchase.

Borrowers typically wait because they don’t know how many days it will take to find a home and have an offer accepted. They worry that by locking in too early, they may miss the opportunity for a better rate.

A longer rate lock is more expensive. For example, a borrower who chooses a 30-day lock on a loan may pay a 4.875 percent rate and zero points, while a 60-day lock might cost 1 point (equal to 1 percent of the loan) or a slightly higher rate with a half-point.

However, with mortgage rates rising, you might consider jumping on the lower rate as soon as possible. Even a small hike, such as a quarter of a point, can mean a difference of hundreds or thousands of dollars in interest each year.

What to ask your lender before you lock

Be sure to get a clear explanation of your lender’s rate lock rules. Find out if your locked rate can change in certain circumstances — for example, if mortgage rates drop, or if you change from a 30-year fixed-rate mortgage to an FHA loan.

Finally, confirm that your rate lock is long enough to cover the entire closing process. For example, if you anticipate that your closing will take longer than a month, talk to your lender about locking in a rate for that period without paying fees.

Make sure you’re financially prepared

Before you lock in a rate, make sure your budget is in order and you are financially prepared to apply for a mortgage.

Ask yourself these questions:

  • Is my credit score good enough to prequalify?
  • Do I know how much I want to spend on monthly mortgage payments?
  • Have I looked for homes in my budget?

If you lock in a rate too soon and end up going with a different type of loan, your rate lock might be void. Borrowers also can lose a rate lock if their circumstances change — such as a shift in their credit score or in their debt-to-income ratio — before settlement.

Click here to get pre-approved for a loan. 

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