TOM & CYNDEE
BROWNER - CRS,
ABR, GRIQUAD CITIES REAL ESTATE WITH RE/MAX
SERVING THE ENTIRE IOWA AND ILLINOIS QUAD CITIES ............................................................
DAVENPORT - BETTENDORF - ROCK ISLAND - MOLINE AND SURROUNDING COMMUNITIES
TOM & CYNDEE
BROWNER - CRS,
ABR, GRI
BROKER OWNERS OF RE/MAX BI-STATE - SERVING IOWA & ILLINOIS
1-563-388-0008 Office - 1-563-388-0083 Fax - 1-866-388-0083 Toll Free - 1-563-570-7629 Cell - 355-1616 Home
Have a question? The answer is just a call or e-mail away. Contact us at tom&cyndee@quadcitiesrealestate.com
We are both Accredited Buyers Representatives (Certified Buyer's Agents) we know you want to make the best decision. You want the best home possible for your investment. We know the market, and we work at your pace and not ours. We will guide you through all the forms, take you through the first time buyer programs and/or financing, inspections and explain everything each step of the way. We take care of all the details and problems before they become a problem to you. Call us on our private line at 570-7629 at RE/MAX BI-STATE or Contact us at tom&cyndee@quadcitiesrealestate.com - LOOKING TO SELL? Check out the services an Certified Residential Specialist can mean to you.
HOW MUCH HOME SHOULD I BUY?
This home is not asked nearly as much as it should be asked. The answer will differ slightly from buyer to buyer, but in general, more is better.
When buyers set out to purchase a home they should be looking at both their near time and long time needs. They should also be looking at their home as one of their investments. If you are single and your near time goal is get out of the rental rut, and into something that will keep pace with inflation while giving you living space that can reflect your identity and needs, that is fine. However, if you can foresee getting married, you might want to allow a little more space for a future family, locking in today's prices and payment and having the necessary space for tomorrow's needs. A young family may want to make provisions for future children. Even middle age buyers, may desire to make room for aging parents or relatives. You get the idea, look ahead and buy for now with a look towards the future.
Realtor's will not put you into a home you can not afford. When you are told how much you can buy, you may be very surprised. Your first reaction may be no way!!! The banks have monitored debt ratio's for home ownership and long term debt for over two hundred years. Adult buyers who purchase homes within these ratio's never lose their homes because they can not make the payments. The banks know this, Realtor's know it, and the underwriters know it. For government insured or guaranteed loans, your house and all long term payments may not exceed 41% of your gross (before tax) income. Conventional bank loans use 28% of gross income for home and 36 to 38% of gross income for total long term debt, including the home payment. Long term debts are any child support, student loans, charge cards, auto payments, home payments, signature notes and other long term payments you are required to pay.
This qualified home price may be higher than you expected. It often is. Tax reductions due to home ownership play a small part in these ratios. Other factors are much stronger. First of all, you are locking in a home price and payment for the next 30 years. The banks know that the first three years will be the tightest for you, but wage increases, will make your home payment less as a percentage of your income each and every year you own the home. Second, homes appreciate and your home will be worth 10 to 30% more within just a few years. If you ever get into trouble, you can always sell, pay them off and walk away with the balance. Third, in Iowa you have a year of redemption after foreclosure, so even it you get laid off long term, injured or something, you have time to recoup your money and bring your payments to the bank up to date before you would lose the home. If you are a renter, and are laid off or injured, you will be on the street within 15 to 30 days after your rent does not arrive on time. So home ownership not only offers you the pride of ownership, the ability to be you, to decorate to your taste and lifestyle, but it also offers some security against short term catastrophes.
As an investment, it is usually better to buy as much home as you can afford. If appreciation averages 10%, the one year gain on a $35,000 home is $3,500, the gain on a $70,000 home $7,000 and a $140,000 home $14,000. Now multiply this over seven years and you will see that the $35,000 home is now $68,205.10; a gain of $33,205.10. However, the $70,000 home over 7 years will now be 136,410.20; a gain of $66,410.20. The question is would you rather have $33,205.10 or $66,410.20. If you offered you the choice in cash, you would have no problem in making the decision. If offered the choice in homes, the decision should be the same, but often is not as anxiety of change makes many choose less home now to realize fewer dollars later.
This is especially true of buyers with high incomes, or incomes that are expected to raise significantly over the coming years, (recent university graduates just entering into their fields of expertise. For these buyers, because of tax considerations, the larger home may be the same out of pocket in the short run. In the long run, the lack of appreciation and tax savings can in some cases, make the smaller home more expensive by tens of thousands of dollars. For these individuals I recommend a planning visit where we can play with the calculator and then recommend that they have their financial planner or accountant check over my numbers. Haven't had my numbers revised yet, but the reassurance makes many new buyers more comfortable taking the plunge for the larger home. Besides the mentioned advantages, these buyers often will avoid the cost of selling and re-buying at a higher price later. Giving them the luxury of having their dream home or closer to it in the beginning.
Everyone has to start somewhere. The $35,000 home is just as important to that buyer as the $450,000 home is to that buyer. We offer the same quality of service to everyone. Most of our business is from referrals from previous clients who were satisfied with our service. Some of them have now purchased four or five homes from us as they moved up the home ownership ladder. So if you would like to sit down and go over your situation with us, the conference is free and perhaps we can point out some items you did not consider. There is no obligation to do anything at anytime. 85% of our time and effort is spend in educating people of their choices and the market.
Call us today for an appointment to examine your dreams at 332-9900 ext. 225