The real estate market in Central Oregon offers some great opportunities for a buyer today! We have several bank owned homes on the market priced very low, sellers that are motivated and doing the best they can to compete with the bank owned homes. Many times we can find a home that brings a mortgage payment lower than what you might pay for rent on the same home. Sounds great, doesn’t it?
The above is true, we can sometimes find a home that you can purchase for less than you could rent it for, but there are factors to keep in mind other than the listing price. A few of the factors we need to keep our eye on are; taxes, home owners association dues, water district, insurance and possibly loan fees such as mortgage insurance.
Taxes – if a home has taxes of $1200 a year this will add about $100 a month to a mortgage payment. What happens though when taxes are $2,400 or $3,600 a year, you guessed it the payment goes up. Tax assessments should always be checked prior to writing your offer, so you can have a good idea what you might be looking at for a payment. If a home is newer, checking to see that a full assessment has been completed is a good idea. When a home is new, often time the county will only show the taxes on the land, not the improvement, this can open the door for a big surprise down the road.
Home Owners Associations – are often referred to as an HOA, some loans will require the fees associated with an association be incorporated into your loan, thus causing your payment to go up (even if not in your loan at some point this fee will need to be paid). If an association fee is $200 a year, the increase in your payment is just over $16, but what if the association fee is $200 a month?
Mortgage Insurance – this can vary by the risk associated with the loan, type of loan and dollar amount of the loan. If the loan you are expecting to use to purchase your dream home is less than 20% down, chances are you will be facing mortgage insurance. You should check with your lender to what fees you might expect that will increase your payment.
Understanding what your payment will include in home ownership, can and will make purchasing a home less frustrating and smoother in the long run. Being prepared as you start your home and loan search is the best advice anyone can give you. Give me a call, I can help prepare you for this exciting time of your life.
photo courtesy of fontplaydotcom on Flickr