The key to achieving your homeownership goals is identifying what you want and educating yourself on the options. Here are some things you will need to think about and information related to each topic. For more information on buying a home, contact CasaUSA Real Estate Network. We strive to provide you with the value you deserve and work hard to earn your business today, tomorrow and beyond.

What type of housing do I want and/or need for my family and our lifestyle?

Types of Housing

Apartment Complex
Apartment complexes are groups of apartment buildings with any number of units in each building. The buildings may be lowrise or highrise. The amenities vary greatly and may include parking, security, clubhouses, swimming pools, fitness centers, tennis courts and / or golf courses.

Attached Single
An attached single is a single housing unit that is attached to other units. Condominiums and townhomes are examples of attached single units.

Condominium
The condominium is a popular form of residential ownership for people who want to own property without the care and maintenance of a house. Condominium owners share ownership of common elements such as halls, elevators, swimming pools, clubhouses, tennis courts and surrounding grounds. Management and maintenance of the building exteriors and common areas are provided by the governing “association” or by outside contractors. These expenses are paid out of monthly assessments charged to the owners. Oftentimes, if a building needs work that extends the income from the monthly assessments, owners will be charged a “special assessment” to cover the additional unanticipated costs. Examples of a special assessment might be a new roof or tuckpointing before expected.

Conversion
Converted use properties are factories, warehouses, office buildings, hotels, schools, churches and other structures that have been converted to residential use. Developers often find renovation of such properties more aesthetically and economically appealing that demolishing a perfectly sound structure to build something new. In cities like Chicago, an abandoned warehouse may be transformed into a contemporary luxury loft condominium building. Similarly, a closed hotel may reopen as an apartment building. Likewise, an old factory may be recycled into a profitable shopping mall.

Cooperative
A cooperative is similar to a condominium in that it may also offer units with shared common areas. The owners, however, do not actually own the units. Rather, they purchase shares of stock in the corporation that holds title to the building. Owners receive proprietary leases that entitle them to occupy particular units. Like condominium owners, cooperative unit owners pay their share of the building’s expenses. This is a popular form of ownership in very metropolitan areas such as New York.

Detached Single
A detached single unit is a free standing home. This type of housing usually provides the greatest freedom, but also the greatest responsibility since the owner is solely responsible for all the care and maintenance of the home.

Highrise Developments
Highrise developments, also known as mixed-use developments (MUDs), combine such elements as office space, stores, theaters and apartment units into a single vertical community. MUDs are self-contained and often offer convenient options, such as a spa or exercise facility, to those that reside there.

Mobile Homes
Mobile homes were once considered useful only as a temporary residence or for travel. Now, however, such homes are being used as permanent residences or stationary vacation homes. In fact, increased living space now available in the newer models combined with low cost has made such homes an attractive option for many. Mobile home parks make residential environments possible with community facilities; semipermanent home foundations; and hookups for gas, water and electricity.

Modular Homes
Modular homes are another lower-cost ownership option. Each room is pre-assembled at a factory (or sometimes the home is built there in two halves), driven to the building site on a truck, then lowered onto its foundation by a crane. Later, workers complete the structure and connect the plumbing and wiring. Entire developments can be built at a fraction of the time and cost of conventional construction.

Planned Unit Developments
Planned unit developments (PUDs), sometimes called master-planned communities, merge such diverse elements as housing, recreation facilities and commercial concerns in one self-contained development. PUDs are planned under special zoning ordinances. These ordinances permit maximum use of open space by reducing lot sizes and street areas. A community association is formed to maintain these areas and fees are collected from the owners.

Retirement Communities
Retirement communities are often structured as PUDs. They can be found across the Unites States, but are very popular in temperate climates such as Arizona, Nevada and Florida. These communities may provide shopping, recreational opportunities and healthcare facilities in addition to residential units.

Time-Share
Through time-shares, multiple purchasers share ownership of a single property, usually a vacation home. Each owner is entitles to use the property for a certain period of time each year, usually a specific week. In addition to the purchase price, each owner pays an annual maintenance fee.

For more information on types of housing, contact CasaUSA Real Estate Network. We strive to provide you with the value you deserve and work hard to earn your business today, tomorrow and beyond.

What can I afford?

Buying or Renting
Home ownership involves substantial commitment and responsibility. Those who choose home ownership must evaluate many factors before they decide to purchase property. The purchasing decision must be weighed carefully in light of each individual’s financial circumstances. Renters can probably make a higher mortgage payment than their current rent payment, without requiring a pay increase, because of the tax savings realized by home ownership. Below is a guideline that may help put some perspective on buying or renting. In order to see how much you could afford in a home while having the same approximate cost as your current rent, simply do the following calculation:

Take your monthly rent, multiply by 200 = purchase price of home

For example: $1000 × 200 = $200,000.

So in the example above, if you were paying rent of $1000 per month, you would pay approximately the same amount per month to own a $200,000 home (factoring tax savings). Beyond the costs today, you must consider the future costs. As a renter, you are fully exposed to increases in the cost of living, also known as inflation. A reasonable expectation for annual increases in your rent is 4%.

Overall, the decision of buying or renting property involves thoughtful consideration of the following:

• How long do you plan to live in a particular area?
• What is your financial situation?
• How affordable is the housing in your area of interest?
• What are the current lending options?
• What are the tax consequences of owning versus renting property?
• What may happen to home process and tax laws in the future?

For more information on buying versus renting, contact CasaUSA Real Estate Network. We strive to provide you with the value you deserve and work hard to earn your business today, tomorrow and beyond.

What other expenses do I need to consider?

Ownership Expenses
Home ownership involves many expenses, including utilities (such as electricity, natural gas and water), trash removal, sewer charges, and maintenance and repairs. Owners also must pay real estate taxes, buy property insurance and repay any mortgage loan with interest.

To determine whether a prospective buyer can afford a certain purchase, lenders traditionally have used this basic formula: the monthly cost of buying and maintaining a home (mortgage payments – both principal and interest – plus taxes and insurance) should not exceed 28 percent of gross monthly income. The payments on all long-term debts combined with that house payment should not exceed 36 percent of gross montly income. These formulas may vary depending on the type of loan program and the borrower’s earnings, credit history, number of dependents and other factors.

For more information on expenses related to homeownersip, contact CasaUSA Real Estate Network. We strive to provide you with the value you deserve and work hard to earn your business today, tomorrow and beyond.

Is buying a home a good investment?

Investment Considerations
Purchasing a home offers several financial advantages to a buyer. First, if the property’s value increases, a sale could bring in more money thatn the owner paid, creating a long-term gain. Second, as the total mortgage debt is reduced through monthly payments, the owner’s actual ownership interest in the property increases. This increasing ownership interest is called equity and represents the paid-off share of the property held free of any mortgage. A tenant may accumulate good credit by paying the rent on time, but a howeowner’s mortgage payments build equity and so increase net worth. Equity also build when the property’s value rises through area appreciation. The third financial advantage of home ownership is in tax deductions available to homeowners but not to renters.
For more information on investment considerations, contact CasaUSA Real Estate Network. We strive to provide you with the value you deserve and work hard to earn your business today, tomorrow and beyond.

What are the tax benefits of homeownership?

Tax Benefits
To encourage home ownership, the federal government allows homeowners certain income tax advantages. Homeowners may deduct from their income some or all of the mortgage interest paid as well as real estate taxes and certain other expenses. They may even defer or eliminate tax on the profit received from selling the home. Tax considerations may be an important part of any decision to buy a home.

The federal government excludes $500,000 from capital gains tax on sale profits from a principal residence as long as the taxpayers are married, filing jointly. Taxpayers who file singly are entitled to a $250,000 exclusion. The exemption may be used repeatedly, as long as the homeowners have occupied the property as their principal residence for two out of the last five years. For most homeowners, the net result is that capital gains tax is a non-issue.

For more information on the tax benefits of homeownership, contact CasaUSA Real Estate Network. We strive to provide you with the value you deserve and work hard to earn your business today, tomorrow and beyond.

What is homeowner’s insurance and do I need it?

Homeowner’s Insurance
A home is frequently the biggest investment many people ever make. Most homeowners see the wisdom in protecting such an important investment by insuring it. Lenders usually require that a homeowner obtain insurance when a debt is secured by the property. While owners can purchase individual policies that insure against destruction of property by fire or windstorm, injury to others, and theft of personal property, most buy packaged homeowner’s insurance policies to cover all these risks.

For more information related to homeowners insurance, contact CasaUSA Real Estate Network. We strive to provide you with the value you deserve and work hard to earn your business today, tomorrow and beyond.