Not an Impossible Dream

I’ve had many opportunities to go to Hawaii in my life, but I always found a way to put it off because I was saving it “for my honeymoon.”

Twenty years later, I am still single and have yet to go to Hawaii. The lesson here is that you don’t have to wait for Mr. or Mrs. Right to come along in order to enjoy life, own a home, invest in your future. or even start a family.

Whether you are single by chance or by choice, owning a home does not have to be an impossible dream. Let’s look at some of the obstacles that you may think stand in your way.

•“I need sufficient savings for a down payment and closing costs.”

Today there are many programs available that require little or no money down. It is also very common today for a seller to contribute toward the closing costs. Loans close every day where borrowers do not have to bring a cent to the closing.

•“My credit may not be good enough or I don’t have any credit.”

You might be surprised to learn of the programs available that cater to borrowers with credit issues. If you have no credit, there are programs available that will accept alternate sources of credit, such as rent payments, utilities and insurance payments.

If you have had some difficulty in the past, there are programs that will accept lower credit scores. Perhaps, if you need to repair a few items before purchasing, the lender can recommend a plan to get you back on track.

•“Living in a single household may not give me enough income to qualify for a mortgage loan.”

Today, with the exorbitant costs of rent, you may be able to find a home where the mortgage payment is comparable to renting. Many lenders have programs available that will allow you to use alternate sources of income, (cash income, boarder income, etc.) In the past, the debt-to-income ratio was very conservative, but today it has been stretched to allow more borrowers to purchase a home.

•“Homes are a money pit ……what if I cannot afford the expenses that go along with owning a home?”

Yes, you will have additional expenses that will include the maintenance and repair of your property. If the furnace goes, the roof needs repair or the faucet needs to be fixed, it is your responsibility. However, there are many other positive reasons for owning a home.

Owning a home is one of the best ways to create future wealth. Each time you make a mortgage payment a portion of that payment goes toward your principal balance, which in time creates equity. That equity can eventually provide you with the ability to purchase a larger home, assist your children with their educational expenses or provide for future investments.

It could also provide for you in your retirement years.

Owning a home has tax benefits. The mortgage interest you pay each month can be deducted from your taxes up to certain limits of debt. Every person’s situation is different and it is always a good idea to check with your tax accountant.

Owning a home of your own allows you the freedom to live your desired lifestyle. If you want pets you can have them. If you want to paint your walls with polka dots, you don’t have to ask anyone. Perhaps you might like to plant a vegetable garden, put in a swimming pool or play your guitar into the night …. the choice is yours. Of course, normal limits should be observed. In most of these scenarios you won’t run into the“it’s not in the lease,” like you would if youwere renting your house or apartment.

If you have children, both national and regional studies have shown that children of homeowners are more likely to stay in school through high school, score higher on math and reading achievement tests and are more likely to graduate from college.

Besides, there is nothing like having your own backyard to play in.

There are fears associated with home ownership and those fears may be increased if you are in a single household.

However, the benefits are substantial. Paying rent will not provide you with future equity as it will your landlord. If you wait until you find someone to share in the expense and the responsibilities, you may prolong the ability to create equity, provide for your retirement and live more freely. It may be time for you to sit down with a mortgage professional to review your financial situation and explore the many options available.

Jeannie Boudreau has 23 years experience in residential lending and is branch manager of National City Mortgage in West Springfield; (413) 788 – 9924.