vv-3 - Home Buying Seminar Advantages of Renting High...

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Home Buying Seminar
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Advantages of Renting High mobility No repairs and maintenance Minimal financial commitment Lower initial costs Easier to budget
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Disadvantages of Renting Rents may increase unexpectedly Possible restrictions No tax benefits No potential for property appreciation
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Advantages of Buying Flip side of disadvantages of renting Fixed monthly mortgage payment Leverage Can borrow against equity
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Disadvantages of Buying Low mobility—very Low liquidity Significant upfront costs Higher living expenses (early years) Large financial commitment Possible decrease in value Possible mortgage default
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So you decide to own… Buy vs. Build Buy Foreclosure/Repo Short-sell MLS listed FSBO Build Cookie Cutter Custom Build
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A Six Step Process to Buying a Home
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Step 1--Analyze your finances and know your bounds Pre-qualified vs. Pre-approved Getting pre-qualified is the initial step in the mortgage process, and it's generally fairly simple. You supply a bank or lender with your overall financial picture, including your debt, income and assets. After evaluating this information, a lender can give you an idea of the mortgage amount for which you qualify. Pre-qualification can be done over the phone or on the internet, and there is usually no cost involved. Loan pre-qualification does not include an analysis of your credit report or an in- depth look at your ability to purchase a home. Getting pre-approved is the next step, and it tends to be much more involved. You'll complete an official mortgage application (and usually pay an application fee), and then supply the lender with the necessary documentation to perform an extensive check on your financial background and current credit rating . (Typically at this stage, you will not have found a house yet, so any reference to "property" on the application will be left blank). From this, the lender can tell you the specific mortgage amount for which you are approved. You'll also have a better idea of the interest rate you will be charged on the loan and, in some cases, you might be able to lock-in a specific rate. With
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This note was uploaded on 04/07/2011 for the course BUS M 301 taught by Professor Jimbrau during the Winter '11 term at BYU.

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vv-3 - Home Buying Seminar Advantages of Renting High...

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