Your home is your castle. You can decorate it, adapt it, and enjoy it. You can take comfort in knowing that it is yours along with all the rights of ownership. You can also enjoy knowing that it is a good investment for these reasons:
Stable Housing costs - While rent payments typically increase year after year, your mortgage payment can be structured to remain the same year after year. What looks like a substantial payment today will look relatively much less expensive as the years go by.
Appreciation - Home prices typically increase in value, especially over the long term. Because you are earning appreciation on the full home value (not just your down payment amount), every small percentage increase in the home price results in a substantial return on your investment!
Tax Benefits - Not only is mortgage interest usually deductible, but you also get substantial tax breaks on the appreciation when selling your home.
Scheduled Savings - A portion of your mortgage payment is applied to the principle balance (there are exceptions such as interest-only loans). So you are building up equity in addition to your gains due to appreciation!
The Escrow Process
Escrow is an independent neutral account that holds onto the deposits and other fees until all obligations between the buyer and seller have been met. In other words, it keeps everyone's money safe until the deal closes! Here's a flowchart of what typically happens between the opening and close of an escrow:
Buyer and seller sign purchase agreement
Buyer or seller's agent opens escrow
Escrow holder orders preliminary title report
Loan process
Seller submits reports and
disclosures to buyer
Inspections Ordered
Inspections Ordered
Appraisal
Buyer reviews/approves inspections,
reports, and disclosures
Repair requests negotiated
Seller and buyer sign escrow instructions
Buyer's loan documents executed and signed
Seller signs grant deed,loan payoff, and other documents
Buyer deposits remaining down payment to escrow
Escrow receives loan funds
Record deed, final settlement statement, and disburse funds
Mortgage Brokers
The mortgage broker is the person that shops for your loan and finds a mortgage banker that will fund the loan. Since loan terms and conditions vary widely and frequently according to buyer's qualifications and needs and market conditions, a mortgage broker's assistance is advisable to find and optimal loan for your situation.
Financial Advantages of Home Ownership
Stable Housing costs - While rent payments typically increase year after year, your mortgage payment can be structured to remain the same year after year. What looks like a substantial payment today will look relatively much less expensive as the years go by.
