In a nutshell, it can.
LGFCU will finance 100% of the home for members. Principal and interest on a $110,000 home mortgage will run about $678 for a 30-year Adjustable Rate Mortgage at a 6.25 annual percent rate. Add to that insurance and taxes of about $150. This makes for a monthly payment of $828; 28 percent of the members’ income and $3 per month more than what they were paying in rent. That’s pretty much it. Yes, there are some closing costs, but if it's a First Time Homebuyer loan, $1,000 of it can be built into the mortgage—and the total amount should be no more than $1,800 on the $120,000 mortgage.
Seems too simple? Well, it is pretty simple, but it’s still a big step and a big commitment. This is long-term and you can’t just move on a whim like you may when you’re a renter. But, you also are building equity that will serve you down the road. You need to also remember that you will be the one cutting the lawn—but it’s your lawn. You’ll have to maintain and keep up the home. But, you can also decorate and paint how you see fit. There are many things to consider, but no matter what, your money is more apt to work for you when you’re putting it into your home.
Another consideration is the tax advantages of home ownership. Interest on the mortgage may be deductible and some of your moving and closing expenses may be deductible as well. Talk to a tax professional to find out the details regarding home ownership and taxes.
As for the expense side of things, keep in mind it does cost money to move, get electric connected, have a cable installer come out and so on, but when you stand at the curb and look at your home…and when you see the equity build as the years go by, you’ll know you made the right decision. Give us a call and we’ll see what we can do for you.
As always, with any financial or big decision you make, do some research and know what you are getting into before you start seriously considering it. The more you know, the better you are prepared to understand the home-buying process.
LGFCU Financial Advisors and Planners are available, for free, to help you navigate the road ahead—call 800.344.4648 to contact the Financial Services staff.
All examples and numbers are for illustrative purposes; actual numbers will be determined during the application process.
