Rebecca Richardson - Mortgage Consultant
The more you know, the more you can grow - financially
Owning a home often unlocks the door to what can become long-term generational wealth. One of the biggest joys I have as a mortgage lender is to help a first-time homebuyer buy a home they never thought was possible or help someone use the equity in their home to fund life-changing events. In this case, the more you know about personal finance can pay dividends financially.
Power of financial literacy Only seven states require a financial literacy class to graduate high school, so it’s little wonder that when they become adults, they fail to understand certain concepts. Most people buy just a few homes in their lifetime and when they do, it can be years apart. Whereas a mortgage lender like myself, we do hundreds of transactions a year. Plus, there are many factors involved in a mortgage beyond the price of the home. There is the interest rate, insurance, inspections, appraisals, points, PMI and so much more. It all adds to the general confusion for the average homebuyer. That’s why I am so passionate about providing as much education to people about the home buying process. I’m here because owning real estate is the #1 way that many people can build wealth.
Buying a home together when not married Looking to buy a home with a best friend, partner, or other family member? Well, it can be done. You don’t have to be married to the person you are buying a home with, unless it is a Veterans Administration loan.
But if you do plan to buy a home with a relative or roommate, it is important to know the different rules that govern the mortgage.
I’ve had clients buy with parents or adult children and I also had clients who bought with partners, roommates and even friends.
So, look at your options. Consult with professionals – lenders, real estate agents, financial planners, lawyers – to know your options and make it happen.
Selling to family This housing market is a mess and it’s not likely to get dramatically more affordable anytime soon. You started to talk to your aunt who said she was thinking of selling her home. But you really aren’t in a financial position to make an offer – or are you?
You could suggest your aunt do a gift of equity – which is basically the difference between the actual sales price and the market value of the home. That’s where she can cover your down payment and closing costs out of the equity she has.
Let’s say the house is worth $400k and she sells it to you for that amount. You get a loan for $320k and then from the $400k sales price your $80k down payment and closing costs are deducted and she gets what’s left over as profit. It’s a win-win. You get a home you thought was out of reach financially and your aunt is able to downsize and have some additional money in savings for her retirement.
There are many different options when it comes to buying that dream home. Follow me to stay update to date on the latest mortgage tips. I’m always keeping it real with real estate.