East Tennessee Real Estate & Neighborhood Source
Hi, it’s Troy! I just finished up publishing my FALL 2015 Real Estate Selling and Buying Guides. Just click below to download them. Don’t hesitate to contact me at any time with questions. Feel free to share these with anyone you know who is thinking of buying or selling soon. If there is anyway I can help you, your family, or friends just let me know. I’m here to serve!
CLICK HERE FOR THE 2015 FALL REAL ESTATE SELLING GUIDE
CLICK HERE FOR THE 2015 FALL REAL ESTATE BUYING GUIDE
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If you are planning on buying a home and you aren’t going to pay cash, you are going to need a mortgage. Here is what you need to know about the Mortgage Process and how to qualify for a mortgage along with the steps to take to get approved. Have more questions or interested in starting the process to get a mortgage? Contact me, Troy Stavros with Gables & Gates, REALTORS at 865-777-9191.
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Is buying a home new to you? Trying to figure out how a mortgage works? This mortgage process infographic should help spell out the steps you can expect. Have any other questions about the mortgage process or real estate in general? Don’t hesitate to contact me!
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Sometimes the best way to know whether your current situation is positive, is to look at the history of that situation. So, I decided to take a look at the history of home costs. In other words mortgage rates and payments, over the last few decades. Here’s how it looks:
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So what is equity in a home, and how does it help build wealth?
Citing a recent survey by Merrill Lynch, over 80% of the people in the United States believe that homeownership is still “an important part of the American Dream”.
One of the biggest reasons it’s seen as so important is that it helps build family wealth. Last week, Freddie Mac posted about the power of home equity. They defined home equity as:
“In the simplest terms, equity is the difference between how much your home is worth and how much you owe on your mortgage. You build equity by paying down your mortgage over time and through your home’s appreciation. In a nutshell, your money is working for you and contributing toward your financial future.”
They then showed through a real life example, where a person bought a home for $150,000 with a down payment of 10%, leaving a loan amount of $135,000. The home buyer obtained a 30-year fixed-rate mortgage at 4.5% with a monthly mortgage payment of $684.03 (not including taxes and insurance). They then showed what would happen after just seven years of making their mortgage payment, assuming that the home appreciated 3% in value every year (the historic national average):
And the beauty of equity is that the “Equity in Home” dollar amount continues to build as long as you own the home. Merrill Lynch also published a report previously this year showing the average equity homeowners have acquired at certain age ranges.
As a typical Amerian family, home equity is vitally important to building wealth. Referring to the first scenario above, Freddie Mac explained:
“Now, if you continued to rent, and made the same payment of $684.03 per month, you’d have zero equity and no means to build it.
Building equity is a critical part of homeownership and can help you create financial stability.”
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