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Own A House

Own A House

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Own A House

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  1. Own A House Less than 2% of Americans own a house!

  2. You’ll need a loan • Conventional Loan • For most of us • 0-20% down payment • Usually 30 or 15 years (standard) • Jumbo Loan- 40 years! • Let’s assume you wish to buy a $200,000 house with 20% down ($40,000) $160,000 to finance

  3. Want more risk type of loan? • ARM • Adjustable Rate Mortgage • 7/1 Arm, 5/1Arm, 3/1 Arm • 2% Cap, Lifetime 6% Cap • Once again, assume you’re financing $160,000 loan and doing a 3/1 ARM where rates went up 2% 3 years later.

  4. New ARM rate after 3 years. Oops, it went up!

  5. That’s $981 to $1246 At 2% increase, that’s $265 per month!

  6. So why do an ARM? • Get lowest monthly payment up front • Plan to move before 3, 5, 7 years • You believe rates will go down • You expect to make more money

  7. Don’t forget • Property Taxes! • Home Insurance! Typical Dublin Home: Property Taxes $5,500 That’s $458 a month Home Insurance: $500 year That’s $41 a month

  8. Yet more costs! • PMI- UGH! • When you put < 20% down • You buy insurance policy for lender (bank) to pay principal in case you bolt from house without paying • (150,000 loan, 5% down, PMI $80 mth) • Can get rid of it after you own 20% of house

  9. New House Monthly Payment • Principal & Interest $980 • Property Taxes 450 • House Insurance 40 • PMI- if less than 20% down 120 • TOTAL $1,590