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Why is an Appraisal Important When Buying or Selling a Home?

One the biggest components in buying a home when a lender is involved includes an appraisal. If you buy a home with cash and sometimes with a conventional loan, you can bypass this step. With an FHA loan and an VA loan, you cannot.  What is an appraisal?  In simple terms and Appraisal is a valuation of property.  An appraisal ordered for the purchase of a home is to determine if the price agreed upon by seller and buyer is acceptable by the lending institution. If an appraisal comes in low, the lender will likely decline to fund the deal. Unless the buyer is willing to come to the contracted price the deal to purchase can fall apart.  So what happens if the Appraisal come in Low? Sometimes a buyer will pay over the appraised value in order to buy the home. Sometimes the seller will lower the contracted price to the appraised value in order for the deal to continue. Sometimes the deal falls apart.  Loan types will determine what you can do as a buyer to get past the low appraisal. A con

5 Reasons Buying a Home is Better Than Renting!


Purchasing a home offers amazing financial benefits. Renting a home offers amazing financial benefits for the owner of the property you are renting from. Keep that in mind the next time you think about staying in your rental.

1. You Are Paying For A Home Regardless if You Rent or Buy
   
Some will argue renting eliminates the costs of property taxes and home repairs. All renters should realize that all the expenses your landlord must incur (property taxes, repairs, insurance and etc.) are rolled into your rent anyway along with profit margin.

2.  Home Ownership Is a Form of Forced Savings

Studies have shown homeowners have a net worth 44X times higher than a renter. It was recently estimated that a family buying a average home this past January could build more than $40,000 in family wealth in the next five years.

3. Owning Is a Hedge Against Inflation

Home values and rents tend to go up at or higher than the rate of inflation. When you own, your home's value will protect you against inflation.

4. There Are Still Substantial Tax Benefits in Owning

The new tax reform bill puts limits on some deductions on certain homes but the mortgage interest deduction is not the main source of these gains.

5. Housing Is Typically the One Leveraged Investment Available

Homeownership allows homeowners to amplify any appreciation on the value of their homes by a leverage factor. A 20% downpayment results in a leverage factor of 5, meaning every percentage point rise in the value of your home is a 5% return on your equity. If you put down 10% , your leverage factor is a 10.

Bottom Line:

From a financial standpoint, owning a home is and will always be better than renting.





Comments

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  3. Wonderful Blog!
    I really appreciate your efforts of writing and sharing such a commendable blog. It is true that renting cost you much and sometimes paying home rent can be a big problem. Having your own home can offer great financial benefits. So, avoid renting and buy your own small home. If you are looking to buy a home in Winnipeg, Manitoba then contact Element Realty Inc. and avail the best deals.

    ReplyDelete

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