Challenges of Home Ownership

Challenges of Home Ownership

Home ownership may seem like a maze and comes with numerous challenges and also some positive outcomes.

First the positive.  By purchasing a home, the owner has now created a 'forced' savings plan.  What does this mean?  Part of the money that an owner uses to pay the mortgage goes to interest, which is currently still tax deductible.  Rental payments do not come with any tax deductions.

Over time, the majority of the money spent repaying the mortgage ends up as equity in the home.  When you sell the home at some point in the distant future, in most cases there is more value in the home than mortgage left to repay.  Time helps this scenario too because appreciation of value creates additional equity.


But there are challenges.  Maintenance may be one of them, depending on the condition of the house when it is purchased.  It may take added resources to make the house into your home, which in most cases also adds future value.  

Other challenges include the ability to obtain a mortgage.  So many factors are incorporated into the eligibility process. 


Credit Score is one of those factors.  

Current statistics show that over 52% of all mortgages approved in today's economic market are to borrowers with less than a 749 FICO Score. 

Other factors include your personal financial condition.  Total debt, such as car loans, student loans, boat/recreational loans, all determine your ability to repay based on current income.  If your debt is to high, you may not qualify for a mortgage at the current time.  

How do you know?  Talk to a loan officer you trust.  Start the process months in advance.  Once you commit to purchasing real estate, it is to late to make changes.  Determine today how much debt you have and what your borrowing capacity is now and what your borrowing capacity will be in three months, six months or a year of paying down current debt.  Your loan officer can determine the value of house you can afford to purchase based on current interest rates.  You are now equipped to begin the search for a house.

The most important aspect is asking experts to help you walk through the maze.  We think we can do it ourselves, however experts are able to find the solutions that match your need, making the maze much easier to navigate.

As always, at EXIT Realty North Star we are here to help you find solutions and chart your path.  Give us a call for advice and referrals.

Terry Pauling is a Broker, REALTOR® and ALC at EXIT Realty North Star, 222 W Salem Ave. Indianola, IA 50125. We provide full-service real estate services to the Indianola, Warren County and Des Moines, Iowa metro areas. Find Links and contact information for Terry at   (C) 515-249-9192 

To download my mobile business card Text:  EXITitown   To: 85377


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