Four ways residents can escape the rental trap

Joe Purther

Special to Valley News

After living as renters for the first seven years of their marriage, Geoff and Kristi decided it was time to purchase their first house.

They decided to pass on making a purchase earlier in their lives for reasons ranging from unstable job security to high mortgage rates. Whether justified or not, Geoff and Kristi kept making excuses for not pulling the trigger on a new-home purchase. They had no idea of the opportunity they were missing to start building their personal wealth through home ownership.

As time moved on and their family grew, they knew they finally needed to make that move to build some equity and have something to show for the money they were dishing out just to keep a roof over their heads.

A lot of people have been misinformed, resulting in becoming content to live as renters. Families have been missing out on opportunities because of lack of knowledge. With today’s mortgage options, people can achieve affordable home ownership wherever they want to live.

I offers first-time homebuyers the following insight to help find the right mortgage.

The best mortgage option is not always about the loan rate. Many loans come with advantages such as working in the cost of planned renovations – like adding a bathroom or modernizing a kitchen – into your loan. When shopping for a loan, do not just look at the rate as the bottom line; find out what types of perks different loans offer.

Your occupation might get you a better mortgage. Lenders have programs with discounted closing rates available for teachers, doctors, firefighters, police officers and those who are self-employed. Make sure you ask your lender if there are programs like this available for your profession.

Veterans should make the most of government incentives. Veterans Affairs loans are available to veterans of the U.S. military, current service members or former military spouses who have not remarried. The advantages of a VA loan when compared to traditional loans include: no down-payment for qualified buyers, easier qualification process, better interest rates and no requirements to purchase private mortgage insurance. A VA loan isn’t controlled by Veterans Affairs, only guaranteed by the VA, meaning those qualified for the loans have a number of options when it comes to lending institutions. Every veteran can and should own a home.

Consider your home as the most important investment you’ll ever make. Every month that you make a mortgage payment you are building equity, which is the portion of the property that you actually own, versus what you still owe. As time goes on, your equity goes up, and you can leverage the value to provide college funding, access financial support for unexpected emergencies or even to purchase an investment property. Your equity also provides retirement security, and as a long-term investment, homes generally appreciate in value, providing a profit when you decide to sell.

A mortgage is not a typical loan; it is a financial instrument enabling wealth creation and access to affordable home ownership. Interest rates on a quality mortgage continue to be below 5 percent regardless of program. Considering rates in 1997 were often over 9 percent, it is one of the most favorable times in history to buy a home, an opportunity no one should miss.

“It is not complicated to escape the rental trap, own the perfect home and start building equity toward a better future. Homebuyers just need a trusted mortgage professional who can help them make an effective, informed and confident decision. After all, the perfect home is not only where they will make memories, it is a key contributor for growing their family’s wealth and financial security over time.

Mortgage Coach President Joe Puthur has been a technology leader throughout the last 15 years. His mortgage industry designs have always pushed the envelope, and now he is helping the industry embrace the mobile revolution through Mortgage Coach, www.mortgagecoach.com.

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