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About This Book
Homebuyer Rollercoaster gives readers the upper hand in gaining equity versus throwing their money away.
Buying a home can be an emotional rollercoaster, especially when so many families are led to believe they cannot own a home. Homebuyer Rollercoaster helps readers navigate the ups and downs of buying a home while also helping them to save money and keep their sanity. Monica Benitez uses her real estate expertise to help homebuyers achieve their goal of owning a home, even if they have been told it's not possible. Within Homebuyer Rollercoaster, readers learn how to:
- Select the right home for themselves and their family by learning to dominate the homebuying process
- Create their Homebuyer Blueprint, which will help them reach their desired outcome
- Budget with down payments and closing costs
Monica Benitez offers a wonderful guide for readers to follow when trying to navigate the world of buying a home.
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Chapter One
BUYERSā PERSPECTIVEāWHERE DO I START?
Your story might have started a little like this:
āWe are in the information age, so why is it that I donāt know where to start? With information at an instant, why is it that I canāt find my way? Friends that say one thing and articles that claim another. Workshops, workbooks, webinars ā¦ done them all. Iāve been doing a little house hunting for the perfect house in the perfect location on my own, of course. I donāt need a realtor; I can do this on my own. How complicated can it be?
āEither way, Iām waiting to save more money, and thankfully Iāll be getting my next pay raise soon. Iām working my way through school part-time and waiting for my current car lease to expire. Especially since itās at a high interest rate because I have a couple of collections on my credit. Interest rates keep rising, home prices continue to rise, but thatās okay ā¦ soon I will buy when home values make that dramatic drop that Iām sure is coming! Maybe then Iāll buy a short sale and get that next great deal or better yet a foreclosure. By then I will have enough money saved. Someone told me I need to buy with twenty percent down, and I heard that webinar that said itās best to obtain a home loan and put at least twenty percent down to avoid paying mortgage insurance. I do not want to pay mortgage insurance!ā
Six Years Later
āIām twenty-six now and working full-time. Now I really feel ready to take that step into homeownership! I now have $35,000 in student loans and I desperately need a new car and if anyone knows how hard I have worked itās me! I deserve that brand-new car, and this time I will qualify for a better interest rate, so I can afford the car of my dreams. Iāll just spread the payments into seventy-two months instead of paying $700 a month I can now get the car of my dreams for $590 and financed so it will be mine! By the time itās up, Iāll be making even more money and Iāll be able to buy my own home, and hereās the kicker ā¦ Iām improving my credit score!
āI finally met the man of my dreams in college, where we had endless hours of talking about our future goals. Iām so in love, and I canāt wait to plan the wedding! How exciting! We have saved about $20,000 together, and I do have a new car that still has three more years left before itās all paid off. I finally finished school, and my full-time job is going well. This couldnāt have come at a better time. Once we are settled in, we can start saving again! This time together to finally buy a home! Iām so tired of renting and paying someone elseās mortgage. Every year the rent goes up, this place gets older, and the landlord pays less and less attention to this property and my needs. Everything will work itself out.ā
Four Years Later
āIām thirty and I just got my masterās degree, Iām married, got a new car, and things are just perfect. Within the next couple of years, we will have enough money to buy our home. By then, we will have saved our twenty percent down payment that I was told would be all I needed in order to buy. Besides, Iāve done all the seminars, webinars, and workshops for new homebuyersā¦. How much could have changed?
āSurprise! Life just keeps getting better and better; Iām pregnant and we are expecting our first child. What a blessing! Only thing is we are so crowded here in this one-bedroom apartment, and thereās no yard. Our puppy is growing, and the baby is coming. We are a little shy of our twenty percent down payment and have been paying $1,800 in rent, $60,000 combined in student loans, $1,200 combined for car payments, and even though we are college graduates, we make about $80,000 in our combined household income. Oh, and a few credit cards that Iām still paying down from repairs around the house since the landlord never answers our emails. And I canāt forget that the baby needs things, too.ā
Does any of this sound familiar? Did you ever plan out your life and realize things donāt always work out as expected? Have you ever seen yourself in any of these predicaments? Even though they are all things that bring you joyā¦. What could have been done differently to put you and your family in a stronger buying position?
Recognize the Value of an Asset vs a Liability
We work hard and we all like to be rewarded. However, a car is used to get from point A to point B. Itās a depreciating asset. It will not make you money. On the contrary; it depreciates in value the minute you drive out of the dealership. Yes, you can use it as a tool to help establish credit, but if you do not plan wisely it can be one of the many things that keep you from qualifying for a home loan. This does not mean you canāt have a car, but shift that payment into one thatās more reasonable and allows you to grow your bank account. Once you own your first home, then you can decide if a high car payment is a wise choice.
Why Rent When You Can Buy?
There are many programs out there to help buyers purchase their home. I have sold homes with as little as a first, last, and one monthās security deposit the total of which was $5,000. Closing cost fees and your mortgage payment equal the same amount as your rent payment. These programs are government funded, so they are not everlasting. Once the money runs out, the program no longer exists. However, there are always new programs rolled out, grants, etc. These are all available to make our dream of homeownership come true.
The key here? Donāt wait. Act. When you pay rent, you are not only throwing away your money, you are also losing money. If you would have owned a home, you would have been earning the equity in that homeās growth. In addition, as a homeowner you have so many benefits that as a tenant are not available to you. In the scenario above, the average rent that has been paid is upwards of $172,000, the equivalent of which could have been a substantial down payment. Many of us have never calculated how much money has been spent in rent during our lifetime. See the rental chart below. Where do you fall on this chart? We all need a roof over our heads, and I get that. However, itās not just the $172,000 that has been thrown away in rent; itās the equity that you could have made in the last five years of renting. In todayās market, that represents about another $100,000 in addition to the tax benefits for homeowners. When we file our personal tax returns, we can deduct the interest paid throughout the year. There are also some costs that you pay when closing on a home that can be deducted on your tax returns.
Lastly, depending where you buy, here in Florida you also receive whatās called Homestead Exemption, which is an exemption on your property taxes. In Florida, establishing homestead offers significant protection from creditor claims, as well as substantial real estate tax benefits.
Seek the Advice of a Realtor/Buyerās Coach
Allow yourself to be guided. Do you know the difference between a successful person and unsuccessful person? The difference is the influence of a mentor/coach, and ...
Table of contents
- Cover
- Title
- Copyright
- Table of Contents
- Introduction
- Chapter One: Buyersā PerspectiveāWhere do I Start?
- Chapter Two: Everything Happens for a Reason
- Chapter Three: Home Sweet Home
- Chapter Four: Homebuyer Blueprint
- Chapter Five: Initial Requirements of Buying a Home
- Chapter Six: Other Peopleās Money
- Chapter Seven: Whatās āTheā Big Deal?
- Chapter Eight: Whatās Next?
- Chapter Nine: The Mental Game
- Conclusion: This Is It!
- Acknowledgements
- Thank You!
- About the Author