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Home > Buy Not Rent
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Are you tired of renting?
Do you want to be your own
landlord?
Now is the time for you to
consider buying a property rather than continuing to rent. The
interest rates are low and the prices have stabilized. You can buy
and let tenants pay your mortgage. If you can settle before Memorial
Day, all your summer rentals can be used for your payments PLUS you
can take advantage of depreciation expenses on your income tax. This
can be a WIN WIN situation.
How much can you afford?
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On average your mortgage payments,
including taxes, should not exceed 28% of your gross income.
However, this is looked at on an individual basis when you apply.
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Here is a loan calculator to help you
find out just how much that new house is going to cost you each
month. Just fill in the amounts below with the given number of
payments, interest rate, and loan amount and you will get your
monthly payment.
Remember to add monthly taxes,
utilities and insurance to this figure to be more exact.
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Keep in mind that credit history,
property condition, job stability and other factors may affect
the lender's final decision.
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Another way to give
you an idea of how much of a mortgage payment you can afford is
to use the following 28% -36% test
First, calculate your gross monthly
income (before deductions). You can use income from borrower,
co-borrower, alimony, child support (if 5 years remaining), second
job (if have 2 year history), Social Security, disability etc. (if 5
years remaining), stock dividends, and investment income.
Multiply this gross monthly income by
28%
Multiply this same gross monthly
income by 36%, then subtract monthly debt payments (auto loan, store
charge cards, primary credit card, other credit cards, other loans)
The lesser of the 2 tests equals the
maximum mortgage payment for which you can qualify. Before using the
payment table, remember to subtract monthly taxes and monthly
insurance.
30-Year Conventional Mortgage
Payment Table
| Loan Amount |
6 % |
6 1/4% |
61/2% |
6
3/4% |
7% |
| $40,000 |
$239.82 |
$246.28 |
$252.82 |
$259.43 |
$266.12 |
| $60,000 |
359.73 |
369.43 |
379.24 |
389.15 |
399.18 |
| $80,000 |
479.64 |
492.57 |
505.65 |
518.87 |
532.24 |
| $100,000 |
599.55 |
615.71 |
632.06 |
648.59 |
665.30 |
| $120,000 |
719.46 |
738.86 |
758.48 |
778.31 |
774.33 |
| $140,000 |
839.37 |
862.00 |
884.89 |
908.03 |
931.42 |
| $160,000 |
959.28 |
985.14 |
1011.30 |
1037.75 |
1064.48 |
| $180,000 |
1079.19 |
1108.29 |
1137.72 |
1167.47 |
1197.54 |
| $200,000 |
1199.10 |
1231.43 |
1264.13 |
1297.19 |
1330.60 |
Your FICO Score
(Credit Score)
Options
How will you fund the purchase of a second home? It's
a good idea to get some answers before you start shopping. The
numerous cash buyers in the second-home market have the edge. But if
you're not one of them, getting mortgage preapproval before you
launch your search will keep you competitive if you find a hot
property. For quick cash, borrowing from the cash value of a
whole-life insurance policy is one option, as long as you set up a
repayment plan to preserve the long-term value.
Shop around for the best interest rate if you want a
fixed-rate mortgage on the property. Depending on how long you plan
to own the property, consider exploring adjustable-rate mortgages
with, for example, fixed interest and monthly payments for five to
seven years. If sellers own the property outright, ask if they would
consider seller financing. You may be able to negotiate a lower
interest rate, a lower down payment, and a flexible payment plan.
Renting your
home
One way to defray the costs of owning a second home
is to rent it out when your family isn't using it. Here are some
things to consider:
- If the home is in a development with a homeowners
association, ask if you're allowed to rent out your home. The
answer may be no.
- Limit wear and tear by renting only by the month
or the season.
- Use word-of-mouth advertising; rent to friends
(or friends of friends) who may be more likely than strangers to
treat your place with care.
- It takes time to handle inquiries and deal with
potential renters yourself. Is it worth the expense of hiring a
rental manager who will schedule renters and handle emergencies
and maintenance?
- You may want to add amenities, such as hot tubs,
televisions, gas grills, and a modern kitchen, to keep renters
coming back. You'll also want a locked storage room or closet for
your family's possessions.
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FASY REAL ESTATE
1701 New Jersey Avenue
North Wildwood, NJ 08260
(609) 522-4999 fax: (609)
522-7774
(800) 662-3323
bfasy@comcast.net
cell: (609) 602-4493 |
Your
SECOND home is our FIRST
priority!
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