Buying a home is 38% cheaper than renting a home. This is especially true if you plan on living in one space for at least seven years. As mortgage loans are more affordable now with down payment assistance and different loan options, let’s take a look at the financial benefits of owning a home.

Financial Benefits of Owning a Home

Building equity

One of the largest financial benefits of owning a home is building home equity. When you pay rent to your landlord, you’re setting aside a chunk of money that you’ll never see again. Additionally, landlords have the right to raise your monthly rent yearly, so what you pay today could differ than what you pay monthly next year. When you sign a mortgage loan, you are agreeing to the monthly payment for the life of the loan (likely 15/30 years). So, you can accurately budget your spending every month on your mortgage. When you pay your mortgage, you are building equity as you are paying off your loan. This means that unlike renting, you will see these funds applied directly toward what you own.

Tax benefits

Another one of the biggest financial benefits of owning a home is the mortgage interest deduction. Most of your monthly mortgage payments will go towards interest in your first few years of homeownership. You are able to deduct that interest from your taxes, if your loan is $1 million or less. Additionally, any taxes you pay to the government on your property are deductible from federal income tax.

No longer moving every year

Homeownership increases sustainability and stability. While moving every year from rental to rental may be necessary for your lifestyle, it is a major inconvenience and a financial and emotional burden. Renting can mean you may never know where you are going to live in a year, or how much you’ll be paying. Owning a home allows a financial and emotional investment in both your physical home and your community.

Use your home investment toward another investment

The equity that comes from paying a mortgage is what allows many individuals make future investments in the same home (refinancing, renovations), a higher-valued home (using the equity toward a down payment), a second home (using equity toward a second down payment), or additional financial goals (paying off debt, buying an RV). A home equity line of credit helps homeowners use that part of their home that’s already paid off to obtain financing for additional investments.

You may also like: 4 Benefits of Using a Real Estate Agent

It’s true that anyone can shop for a house, without formally signing on with a real estate agent. But, unless you have time to make home shopping your part time job, an agent will help match you with a compatible property much faster. Here are 4 benefits of using a real estate agent as you search for a new home.

4 Benefits of Using a Real Estate Agent

Expert in the Field

For most large projects, you feel more confident in reaching the end goal with a solid and hard working team. When you hire a real estate agent, they are in your corner 100% of the time. Remember, this is their job, and they have dealt with many situations similar to your in the past. Additionally, real estate agents are able to use their resources to find solutions for you if they don’t have the answer right away. Using a real estate agent will give you the confidence and peace of mind that everything that needs to happen is happening.

Pricing Pro

Most agents can set a price on a home the minute they walk in the door. If they have a lot of expertise in a market, they know how well a neighborhood holds its value too. Agents have the experience to know whether a house is overpriced or underpriced, and can give you the best advice accordingly. An agent will have such a good idea of what you’re looking for so that he/she won’t even waste your time touring houses that won’t work for you. Additionally, real estate agents are market experts, so they know market trends, and can help direct you in the most beneficial direction for you and your wants/needs for your new home.

Trusted Vendor Recommendations

A big part of buying a home is having a home inspector come out to look at it before you buy it. This helps protect you from having to pay for any large fixes that are found along the inspection, or gives you leverage for negotiating a lower sale price. Using a real estate agent opens up their recommendations for home inspectors and other vendors needed along the way. Wouldn’t you feel the most comfortable hiring someone who comes highly recommended?

Negotiation

One of the top benefits of using a real estate agent is negotiation. It’s uncomfortable to negotiate, especially as a first time home buyer.. So let your agent take care of all of that! Having an agent write the requests objectively and forward them to the seller, saves you from getting emotional about the deal. It’s best to let your agent take the heat in difficult negotiations so you don’t get upset about the property, or say something you wish you hadn’t.

You may also like: Tips to Finding the Perfect Western Washington Neighborhood

A large part of what makes a house a home is the neighborhood that surround the house. Amid the excitement of searching for the perfect house for you and your family, don’t forget to pay attention to its surroundings. After all, a neighborhood you love, may be worth sacrificing an extra bathroom or white cabinets. Here are 4 tips to finding the perfect Western Washington Neighborhood.

Tips to Finding the Perfect Western Washington Neighborhood

Note Your Most Frequent Stops

Make a list of all the places you visit on the regular so you know how far the western Washington neighborhood would be from your frequently traveled locations. These places include your gym, church, grocery store, relative’s house, or shopping mall. For each neighborhood you’re considering moving to, list how many miles and how many minutes it would take to drive there. The gas money alone may steer you toward a closer neighborhood. The last thing you want is to regret purchasing a house because it’s too far from your amenities.

School District

Even if you don’t have school age children, buying. A home in a Western Washington neighborhood within a good school district will lift the overall neighborhood safety as well as make your home easier to resell in the future. If you do have school age children, visit each school the home in question is zoned for and make sure it’s to your liking. It’s frequently difficult to opt in to a certain district if you are out of bounds, so make sure you’re setting up your kids for success.

Take a Stroll

Before signing your closing paperwork, make sure to walk round the community on a weekend. Are there a lot of families out and about doing the same thing? Or are most people sticking indoors with the blinds shut? Are people friendly who you pass? Are the parks and common areas well taken care of? Answering these questions will give you a good idea of the sense of community and can also be an indicator of safety. You want to know what to expect when you move into your new home.

Trust Your Gut

The Western Washington neighborhood may be safe and in a good school district, but none of that matters if you don’t feel comfortable there. Can you see yourself spending time on the front porch? Do you see yourself building lasting relationships with your neighbors? Do you think your kids will get along with the neighborhood kids? Your neighborhood can have a huge impact on your daily life. It’s worth the time and effort to research, to make sure you’re moving into the perfect place for you and your family.

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Your credit score is a tool that lenders use to measure to risk of doing business with you. Your credit score is one of the largest pieces that determines if you qualify for a home loan. Here are the factors that make up a credit score.

Factors That Make Up a Credit Score

Payment History

Payment history is the most influential category of your credit score. Simply, if you have a track record of paying all of your bills on time, you are set in this category. The presence of negative information on your credit report will result in a lesser number of credit score points awarded. If you are looking to work on improving your credit history, consider focusing your efforts on this category first as it plays a major role in your overall score.

Amounts Owed

This category looks at the amount of your total debt. This section makes up 30% of your total credit score. Revolving utilization, or the debt to limit ratio on your credit account, is the most important factor considered within this category. Generally, the fewer number of accounts with balances on your reports, the better.

Age of Credit

Did you know that the age of credit also matters? This category makes up 15% of your credit score. Age of credit is comprised of the average age of accounts, how long accounts have been open, and the age of the oldest account. Because of this, it’s not always a good idea to terminate retail lines that you opened in high school/college. These accounts show longevity in your credit account.

Mix of Existing and New Credit

The mixture of accounts on your credit reports is also examined. Both existing and new credit is worth 10% of your credit score. It can help your credit score to have a variety of different account types on your reports. These account types include revolving credit account like credit cards, installment payments like student loans, auto loans, and mortgages. The mixture of loan types positively effects your score. Be cautious of applying for credit too often. When a lender pulls your credit it shows as an inquiry. Too many inquiries and it can negatively affect your credit. The good news is that any harm an inquiry has on your report only lasts for 12 months’ maximum. Additionally, if you’re shopping for credit, like a mortgage or auto loan, multiple inquiries within a short amount of time may only be counted once for scoring purposes.

You may also like: Helpful Real Estate Terms to Know

Purchasing a new home is a very exciting process but can seem like a daunting task especially for first time home buyers. Researching key terms ahead of time will help your home buying process go as smooth as possible. Here are six helpful real estate terms to know.

Helpful Real Estate Terms to Know

Multiple Listing Service

The Multiple Listing Service (MLS) is a database of past and current relate estate listings in a given area. Each region has their own MLS and only licensed real estate agents have access to the listings. However, real estate agents can research listing in the MLS, and can send buyers direct links for listings.

Pre-Qualification vs. Pre-Approval

Two of the most helpful real estate terms to know are pre-qualification and pre-approval. A pre-qualification gives you a financial overview of the mortgage you may qualify for. When a lender takes a look at your credit, income and assets, and other key pieces of documentation, you are pre-qualified. While pre-qualification sounds like pre-approval, they are two different terms. A pre-approval is an official statement from the lender stating which specific mortgage you qualify for. Going to open houses with a pre-approval letter is a good idea as it tells the seller you are serious about buying at this time.

Closing Costs

Closing costs are in addition to the down payment and final sale price of the home. Because of this, closing costs should be considered when making your home decision. These costs usually make up 2 to 5 percent of the home price. Closing costs may include loan processing costs, title insurance, excise tax, and other forms of local taxes.

Escrow

The primary purpose of an escrow for a real estate title transfer is to have a trusted third party hold the seller’s deed to the property, which will be delivered to the buyer upon closing. Escrow offers protection for home buyer with funds being held until the deal is closed.

Earnest Money

Once you select a home, you put down a deposit, known as earnest money. This shows the seller you are committed to buying this specific home. Once deposited, earnest money is held in escrow while final contracts are finalized. When you do close on your home, these funds are applied toward your down payment and closing costs.

Fixed Rate vs. Adjustable Rate Mortgage

In a fixed rate mortgage, the interest stays the same for the life of the loan. In an adjustable rate mortgage, the interest rate can change over the course of the five, seven, or ten-year intervals (depending on the specific adjustable rate loan type).

You may also like: 4 Simple Ways to Save for a Down Payment

2019 has officially begun, and with the new year comes New Year’s Resolutions. Being more active, saving more money, and organizing your life are common resolutions, but what about goals for your home? Here are 4 essential New Year’s resolutions for home owners.

4 New Year’s Resolutions for Home Owners

Start an emergency fund

One of the most essential New Year’s resolutions for home owners is to start an emergency fund. The idea of setting aside $100 cash every month to put in an emergency fund sounds doable, but often falls on people’s “will do later” list. But what happens if you’re faced with a life changing event where you need access to cash? This year, look at your finances and pick a monthly amount to set aside for your emergency fund. You could save over $1,000 in just one year by staying consistent in putting money aside. You’ll be so happy you did if/when the time comes.

Create a disaster kit

Your home is your castle, but it’s not indestructible. If you haven’t already, create a disaster kit to store in your garage so you’re ready to grab it and go should an emergency happen. A disaster kit that includes financial documents, copies of passports, and a home inventory will speed up recovery if disaster hits. Additionally, it’s a good idea to place at least 3 days of canned food in your disaster kit, along with emergency medical supplies so you’re set for a few days.

Budget for home improvements

Most homeowners have goals of what they want to improve in their home, even those who buy brand new homes. This year budget for one or two large projects so you’re able to make progress on this goal list. These large projects may be replacing roofing, kitchen appliances, or adding a living space onto the back of your home. By achieving one or two of these this year, you’ll stay motivated to keep finishing projects throughout the next few years, and with the right budget to do so.

De-clutter

If you feel like you’re running out of storage in your home, it is time to go through each room and de-clutter. Spend a day in each room and create 3 piles: keep, donate, and sell. Once you’ve made your way through your home, combine all the donate items and drive them to a Goodwill or Salvation Army. Once you have all your sell items in a pile, host a garage sale, or sell online via Facebook Marketplace or Craigslist. You’ll find your life less stressful when you get rid of all the unwanted clutter!

You may also like: Benefits of a Smaller Home

Downsizing may seem like a daunting task, but there really are some major benefits of a smaller home. From having less to clean, to less utilities to pay for, to more family time, moving to a smaller home can add value to your life.

Benefits of a Smaller Home

Lower mortgage

The number one reason most people downsize to a smaller home is because they have kids that have left to college and they are left with a 5 bedroom home for just 2 people. Why pay for a home with 5 bedrooms when you only use 1 maybe 2? Moving to a smaller home can help you pay a higher down payment on the new home, and can help you save hundreds of dollars a month in a mortgage.

Less to clean

The amount of space you have to clean is one of the biggest benefits of a smaller home. Gone are the days of setting aside an entire weekend just to clean your home. Have you ever wished you had more house to clean? I didn’t think so. When you reduce the number of rooms in your home, you also reduce the number of surfaces that need to be cleaned. Less room in your home also means less clutter. So it’s really a win win situation.

Less focused on stuff

In a larger home, a big part of your focus is what you’re going to buy to cover all the walls. While furniture is necessary in smaller homes, you’ll have less wall space to cover and likely smaller décor to purchase. You’ll save a bunch of money on décor when you need less stuff!

More family time

When you live in a bigger home, it’s easy for everyone to retreat to their own rooms for time after school to evening. When everyone is thrown together in a smaller living space, it allows for more family time. You’ll spend hours and hours or more time with your family playing games and talking that you wouldn’t necessarily get if you spend all the time alone in your room.

More likely to know neighbors

With big houses comes big lots. And when you have a lot of land, it takes a little more time to spend quality time with your neighbors. Smaller homes often sit closer together. If you sit on your front porch, you’re likely to see your neighbors walking past with their kids and dogs. It’s easy to be a good neighbor when you’re closer in proximity! You’ll find that you become closer with the entire community when you live in a smaller home as well. Attending block parties and neighborhood functions can introduce you to neighbors all around!

You may also like: 4 Reasons to Buy a Home This Fall

The down payment is often the largest hurdle first time home buyers face. Whether you’re going the FHA route and can put as low as 3.5% down, or you’re going the conventional loan route with 20% down, saving for a down payment can take some time. Here are 4 simple everyday ways to save for a down payment.

4 Simple Ways to Save for a Down Payment

Make a budget and stick with it

The number one way to save for a down payment is to create a budget. It’s hard to monitor your finances if you don’t know where you and your family stands. Take some time to review all your expenses every month and see the areas where you are over spending. For a lot of people, dining out can cost hundreds of dollars a week, whereas meal prepping at the grocery store could be a couple hundred dollars a month. Once you are aware of how much you spend in each area, make a budget and hold yourself accountable to sticking to it. Weekly checkpoints are a great way to keep yourself on track.

But first, coffee

Coffee is a huge part of how people function, so it’s hard to think about how coffee can actually cost you hundreds a month. If you pick up a coffee from your local coffee shop every morning, you could be spending $5 a day, for 30 days a month. This means you are allocating $150 a month just to coffee. And this doesn’t even include the days you go back for your afternoon pick me up. Think about buying coffee ground from the grocery store and making your own morning coffee. Also, a lot of workplaces offer coffee in the cafeteria for a subsidized cost or even free, so relying on that for afternoons can also help keep the cost low. Remember, saving doesn’t mean you have to get rid of things all together, it just challenges you to find different approaches.

Manage subscriptions

When you get to the point where you don’t even know what you’re subscribed to anymore, you’re likely spending too much on monthly subscriptions. Go through all your monthly and yearly subscriptions and get rid of services you don’t benefit from. For example, if you find yourself subscribed to multiple music streaming services, pick your favorite one and get rid of the other. These services can give you back $10-20 a month!

Sell items

Selling unwanted items can make you hundreds of dollars a month, while cleaning out your home! One man’s trash is another man’s treasure, truly. So go through your basement and see what you can sell. A helpful tip is if you plan to sell seasonal items, do so about a month before the season/holiday. This catches folks who are looking for that exact item, instead of catching people after the holiday hits and it’s not the front of their mind.

You may also like: 5 Reasons to Invest in Real Estate

Beautiful one story home on 5 acres in Roy, WA with updates throughout. The spacious kitchen is great for cooking and entertaining, while the shop out back is waiting to be put to good use!

home on 5 acreshome on 5 acres home on 5 acres home on 5 acres

One of the many top features of this home is the spacious backyard. The peaceful and private 5 acres is great for farm animals and gardens. This home also comes with a 36 x 36 shop out back.

  •   2 bedrooms, 1.5 baths
  •   1,336 square feet
  •   Updated features throughout home
  •   Large kitchen island
  •   Bethel School District
  •   36 x 36 shop
  •   1 year home warranty included

Contact me at 253-686-2174 to schedule a showing!

You may also like: 5 Reasons to Invest in Real Estate

In the last two decades, real estate has outperformed the stock market at a ratio of 2:1. Real estate has continuously been ranked as the best way to invest money not needed for more than 10 years. So why aren’t more people taking advantage? Here are the 5 top reasons to invest in real estate.

5 Reasons to Invest in Real Estate

Immediate cash flow

Once you buy a property and rent it out, you are receiving cash flow within that first month, and every money after that. If you buy in a hot market, you’re able to use the cash flow to pay back that mortgage as well as use the additional funds for repairs, paying a property management company, or any other house related expense.

Appreciation

While appreciation is largely dependent on property, location and economy, the bottom line is that the US population is growing and the need for housing continues to increase. By way of supply and demand, your home’s value will increase over time. For example, since the inventory of homes in Western Washington is in a shortage, buyers will be willing to pay more for your home since there isn’t much competition.

Equity

If you make paying off your mortgage a priority, the amount of equity – or the amount of house you actually own – grows quickly. If you pay more toward your principal, choose shorter loan terms, and focus on home improvements, you can speed up the pay off process. By paying more toward your principal, the faster your build equity, even if your home is appreciating slowly. By choosing shorter loan terms, you are eliminating the interest rate for the years you aren’t paying a mortgage. For example, a 15 year mortgage is more per month, but over time you actually save a significant amount since you aren’t paying interest on the last 15 years. Finally, by focusing on home improvements, you increase the value of your home and narrow the gap between how much it’s worth, and how much you owe.

Tax breaks

Investing in real estate can come with tax breaks, which makes this one of the top reasons to invest in real estate. Mortgage interest, operating costs, property taxes, and insurance are among the areas you’re able to deduct from your taxes. You’re sending less money to the IRS, and increasing your cash flow.

You don’t have to be the landlord

If you buy an investment property with the idea of just wanting the monthly income without doing the maintenance, a property management company can help you. When you hire a property management company, they can take calls about leaky faucets and drafty windows. Yes you’ll be receiving less monthly income since you’ll have to pay the property management company, but you’ll have much less to worry about. This is an especially good idea for those who buy a rental out of state.

You may also like: 4 Reasons to Buy a Home This Fall