Financial Advice! Why Purchasing a Home Is Better than Renting

In today’s economy, it’s a common strategy to try and keep expenses down, reduce costs, and “just hang on” while things rebound. And, with economic pressures, this strategy may seem attractive; to just rent for a while and “save some extra money.”

In most cases, though, this is really a misconception. Money paid out as rent is simply money spent. It’s like burning money – aside from the roof over your head for another month, the only person that benefits from that money is your landlord.

On the other hand, turning your rent payment into a mortgage payment will allow that roof over your head to turn into an investment and allow your money to work for you! There are plenty of Phoenix homes for sale available in the Phoenix MLS, so now may be the time to make a prudent decision.

For starters, every dollar of interest paid on your mortgage is tax deductible. Typically, in the first five years of your new mortgage, most of your payment is interest, and therefore is tax-deductible. For a mortgage payment of $1000/monthly, a homeowner could see $8,000-$10,000 in tax deductions.

Another BIG break available right now is record low interest rates. Current rates are in the range of 3.5%-4.0% and allow for a mortgage amount well over $200,000, if you want to keep your payment under $1000/month. Situations do vary, but most home buyers are surprised at what the kind of home and purchasing power is available to them. We have great mortgage officers available if you have questions!

Another great reason to purchase is that once you own a home, you will have potential for future appreciation. On average, most Phoenix Arizona homes appreciate 3-5% per year, often doubling (or more) the value of your investment over the term of your mortgage. In 2012, Phoenix real estate saw increases from 20-30% in home values. On a $150,000 home, that is an increase in value of $30,000-$45,000.

Finally, aside from the financial advantages, as a homeowner, you have the powerful “Joy of Ownership.”  You get to enjoy your home and your home is now YOUR castle – not someone else’s property that you’re living in temporarily. As a home owner, you can paint the walls, pick out your favorite carpet, enjoy your gourmet kitchen, splash around in your pool… You get to decide how you live!

Today is a great time to buy a home. Our Phoenix AZ Realtors would love to help. Contact us at www.ThompsonGroupAZ.com or 480-776-5214.

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Arizona Home Buyers: To Do, or NOT To Do?

Many potential buyers of Phoenix Homes for Sale are often unaware that many of their actions in other parts of their lives can have a significant impact on the home buying and financing process. As a prospective buyer looking for a home in the Phoenix Real Estate market, keep in mind these questions:

  • I have a new job offer, should I change jobs? Changing jobs as an upward movement in the same line of work is okay. Changing jobs into a different line of work can be an issue, and changing jobs for less money is a red flag, depending on the circumstances. Regardless of the reason, pay stubs covering the last 30 days will be required for loan approval.
  • We just sold our classic car for a pretty high price. Is it okay to deposit that money? Moving money around is okay as long as you can paper-trail it. If you move it from one account to another it’s pretty easy to show the money coming in and out of the accounts. Making large deposits that can’t be paper-trailed is a bigger issue – for example, selling items from around the house (like a garage sale) and then depositing those funds into the bank. These funds are nearly impossible to prove their source (especially if it’s a large deposit) and, therefore, would not be included in available funds for closing. Literally, the money is excluded from your qualifying assets. Any deposits outside of payroll deposits (usually over a few hundred dollars) need to be sourced from an acceptable source (i.e. – no selling drugs to qualify!).
  • How much money should I save? Generally, savings of 3.5% of the purchase price is enough to qualify for an FHA loan for Phoenix Arizona Homes. New programs now allow for lower down payments than 3.5% and are wonderful programs for first time home buyers. A great loan officer will be able to tell you which programs may be best for you. Saving more money to put down is also a smart idea. A larger down payment will allow for a better financing, and the extra money could help with purchase of new appliances and potential repairs at your new home.
  • Should I make big purchases before closing escrow? No, no, no — not without speaking to your loan officer first. Large purchases made on credit for a new car, appliances, or even furniture for your new home may push your debt level too high and prohibit the financing of your new home.
  • I was planning on taking a trip out of town – is that a good idea? Probably not, if you can avoid it. But if your trip has already been planned for months in advance, our Phoenix AZ Realtors can help work out the logistics. With faxes and email available throughout the world, most escrows can continue while you are away on business – or enjoying fun in the sun.
  • I have a bankruptcy, foreclosure or short sale on my credit, can I still buy? Most times when a borrower had a past issue on their credit, a good loan officer will be able to give good advice about corrective steps to take. Most borrowers’ past mistakes may be repaired through the passage of time and by establishing new credit. Situations vary, so speak to a good loan officer about your situation.

As you prepare to begin the process of buying a home, it will help you greatly to make sure that actions you take aren’t detrimental to your financing and buying process. Give us a call today at 480.776.5214 – we will not only help you search through the prospects in the Phoenix MLS, but we’ll also help you strategize and avoid potential pitfalls to financing.

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Arizona Home Buyers: To Do or NOT To Do?

Many potential buyers of Phoenix Homes for Sale are often unaware that many of their actions in other parts of their lives can have a significant impact on the home buying and financing process. As a prospective buyer looking for a home in the Phoenix Real Estate market, keep in mind these questions:

  • I have a new job offer, should I change jobs? Changing jobs as an upward movement in the same line of work is okay. Changing jobs into a different line of work can be an issue, and changing jobs for less money is a red flag, depending on the circumstances. Regardless of the reason, pay stubs covering the last 30 days will be required for loan approval.
  • We just sold our classic car for a pretty high price. Is it okay to deposit that money? Moving money around is okay as long as you can paper-trail the money. If you move it from one account to another it’s pretty easy to show the money coming in and out of the accounts. Making large deposits that can’t be paper-trailed is a bigger issue – for example, selling items from around the house (like a garage sale) and then depositing those funds into the bank. These funds are nearly impossible to prove their source (especially if it’s a large deposit) and, therefore, would not be included in available funds for closing. Literally, the money is excluded from your qualifying assets. Any deposits outside of payroll deposits (usually over a few hundred dollars) need to be sourced from an acceptable source (i.e. no selling drugs to qualify!).
  • How much money should I save? Generally, savings of 3.5% of the purchase price is enough to qualify for an FHA loan for Phoenix Arizona Homes. However, saving more money to put down is always a great idea. A larger down payment will allow for a better financing, and the extra money could help with purchase of new appliances and potential repairs at your new home.
  • Should I make big purchases before closing escrow? No, no, no – not without speaking to your loan officer first. Large purchases made on credit for a new car, appliances, or even furniture for your new home may push your debt level too high and prohibit the financing of your new home.
  • I was planning on taking a trip out of town – is that a good idea? Probably not, if you can avoid it. But if your trip has already been planned for months in advance, our Phoenix AZ Realtors can help work out the logistics. With faxes and email available throughout the world, most escrows can continue while you are away on business – or enjoying fun in the sun.
  • I have a bankruptcy, foreclosure or short sale on my credit, can I still buy? Most times when a borrower had a past issue on their credit, a good loan officer will be able to give good advice about corrective steps to take. Most borrowers’ past mistakes may be repaired through the passage of time and by establishing new credit. Situations vary, so speak to a good loan officer about your situation.

As you prepare to begin the process of buying a home, it will help you greatly to make sure that actions you take aren’t detrimental to your financing and buying process. Give us a call today at 480.776.5214 – we will not only help you search through the prospects in the Phoenix MLS, but we’ll also help you strategize and avoid potential pitfalls to financing.

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Financing for Medical Practice and Equipment

100% funding is available for the purchase, start-up or buy in of a medical, dental or veterinarian practice.  100% financing and simple application process for equipment financing amounts under $200,000 also available for practices in Arizona.  If you are a physician and considering moving to the Phoenix Metro area including Chandler, Gilbert, Mesa, Scottsdale and Tempe please contact Brion H. Crum with Merrill Lynch to learn more about these service.  Site analysis and practice management is available as a service to physicians utilizing these services.

Brion H. Crum – Financial Advisor

480 624-0432 Office

www.fa.ml.com/brion.crum

brion.crum@ml.com

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