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Welcome
to Homefront News, a quarterly newsletter presented
by Bernie Saul, President, Equitylink Mortgage, Inc.
Archives
July,
2005
Inside
this Issue:
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Buying
vs. Renting
It
still makes sense! Nearly a third of all American
households are still renting… and for them,
they could be paying a hefty price. Additionally,
the children of the baby boomer generation are
at or near the home buying age. But, these echo
boomers could mistakenly decide to put off the
purchase of a home because of all the noise about
a bubble in home prices. Is there a bubble? Certainly
not! Even if interest rates move higher, it won’t
be enough to cause a slide in home prices. The
key to a healthy housing market is the job market!
If the payment on a new home is increased due
to higher rates, it generally won’t stop
most people from buying the home they have been
dreaming about. But, if they feel their job is
in jeopardy, that might be enough to stop them
from going forward on that home purchase. However,
such procrastination on a home purchase could
be costly. If an individual is renting for $850
per month, and the landlord increases the payment
by a modest 5% per year, in five years, that person
will have forked over $56,000 without anything
to show for it.
If
that same person purchases a $200,000 home with
no money down, they could enjoy a monthly payment
of $1,200 per month, including property taxes
and insurance. Assuming a 25% tax bracket, this
could be the equivalent of that $850 rent during
the same period after their tax benefit.
And
the financial benefits of home ownership are even
greater than that… as the mortgage balance
is paid down a little each month, at the end of
five years that same person could owe $15,000
less than when they started. Additionally, if
that same home appreciates at a modest 3% per
year, the value rises to $232,000. That additional
market value plus the $15,000 in equity from principal
reduction, results in $47,000 in additional net
worth; as opposed to $56,000 in worthless rent
receipts, resulting in a $103,000 net swing!
But,
if laying out the initial increase in monthly
payment is a burden; and subsequently waiting
for the tax refund, the IRS is willing to help.
Rather than wait till the end of the year to derive
the tax benefit from the new home purchase, a
person can simply adjust the amount of withholding.
This allows an individual to have less federal
and state income tax withheld from their paycheck
so they can handle the new mortgage payment more
comfortably. In effect, a person is enjoying their
tax refund as they go instead of letting Uncle
Sam hold onto it all year, interest free. Visit
www.irs.gov and use the IRS withholding calculator
to calculate the effect of the change in withholding
upon your paycheck.
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Interest
Rate Update…
1st
mortgage rates remain at record lows! We do
anticipate a volatile bond market in the immediate
future will pressure 1st mortgage rates to rise
slightly. Waiting for lower rates will likely
be futile.
2nd
mortgage rates continue to creep up monthly.
The Prime Rate is now at 6.25%, which is the
index that most home equity loans are tied to.
This upward trend is expected to continue.
Call
me for details...
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Colorado
Adventures...
...for
the whole family, within an hour's drive. Some of my
favorite getaways are among the Jefferson County Open
Spaces, and this month I want to feature one of my favorites,
The Pine Valley Ranch. To get there, take Hwy 285 south
to Pine Junction (on the way to Bailey). At the stoplight
in Pine, turn left, go 6 miles, turn right at the sign
for Pine Valley Ranch. Take the whole family, from the
oldest to the youngest, for a picnic, hike, fishing,
or just to read a book along the stream banks. Some
of the notable features of this seldom utilized resource
include:
- Handicap
accessible, including fishing platform
- Modern
restrooms
- Stream
fishing for trout
- Lake
fishing for trout with easy, safe access
- Picnic
tables
- Hiking
trails along the stream as well as on the mountain
- Wildlife
viewing for deer, beavers, black squirrels, dippers
(birds), fish, and bats
- No
admission fee!
Take
lawn chairs and a picnic lunch to the fishing lake,
to let the kids catch some trout while you relax and
get some sun or opt for shade under the picnic shelter.
Remember,
young people 14 and above must have a valid fishing
license. Both worms and/or power bait are effective
in this well stocked fish pond. During the heat of the
day, the trout will be foraging along the bottom, so
that is where you will want to place your hook and line…
on the bottom. Where possible, the fish prefer shaded
areas. Take your camera, sun screen, wet-wipes, and
insect repellant, to be prepared for any eventualities.
These
opportunities are the very reason we choose to live
here!
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Where’s
My Lender?
Too
few loan officers make a habit of attending their client’s
closing. I am amazed that only about 30% of loan officers
make this a regular practice. How important does a business
deal have to be to motivate the deal maker to participate
all the way to the end? To be sure, loan officers who
do not
attend,
are avoiding being held accountable at the closing table
for any changes or surprises.
I
proudly declare that I attend every clients closing
which occurs in the metro Denver area.
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Our
Most Popular Loan Product!
We
are particularly effective at using out of the box strategies
to structure loans in the clients unique interest; to
avoid mortgage insurance or perhaps the jumbo loan rates
above $359,600.
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The 2005 Conforming Loan Limit of $359,650
is the break point before loans fall into Jumbo rates which are at a higher interest.
This figure is up $11,000 from 2003.
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Please
let me share with you...
...
my excitement regarding two extraordinary vendors who
you will want to know about...
First—
An insurance broker like I have never known before;
Patty Armstrong has saved my family as well as several
of my clients, a lot of money on our home and auto insurance
premiums. Patty is with Colorado Insurance Sales &
Service. Call her at 720-283-1722. You’ll be glad
you did.
Second—
A carpet cleaner that is far superior to others we have
tried in the past. Doug Keil of Alpine Carpet &
Upholstery has cleaned both floor tile grout and carpets
in our home with wondrous results. Doug uses an Orbital
Oscillating Pad method with 100% satisfaction guarantee.
No hidden charges or gimmicks. You can call Doug at
303-933-5219 for a pleasant experience.
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Thank
You for Referrals From:
- Randy
Brown
- Larry
Ray
- David
Beck
- George
Benson
- Evangelina
Alphonse
- Todd
Thacker
- Brad
Atherton
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FREE
NOTARY SERVICES !
As
a free service to our valued clients, we are happy
to notarize your document in our office at no
charge. Traveling notary service is also available
for a fee.
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