Ideas to purchase property and your dream land

A buyer will secure financing from a lending institution and pay for the full amount of the purchase price with a combination of the borrowed funds and his own funds (or his "down payment").

One way to buy a home is to pay cash. But the typical family is not in a position to do this, and thus must arrange to finance its home purchase. Most families can afford only a modest down payment and are forced to secure the remainder of the purchase price by mortgage from some lending institution. The larger the down payment, the smaller the total interest payment over the term of the mortgage. Buyers, however, should not use all of their savings for the down payment, thus depriving themselves of any reserve to fall back on if extraordinary expenses arise or income falls in the future.

First there's the down payment and closing costs to muster. Then there's the property tax hit. And maintaining a residence isn't cheap. When it's time to move, "pick up and go" is hardly a feasible option. 

• Tax deductions

 

The following can be eligible for a deduction:

Your property taxes. Don’t forget to include any taxes you may have reimbursed the seller for. These are taxes the seller had already paid before you took ownership. You won't get a 1098 report listing these taxes. Instead, that amount will be shown on the settlement sheet.
The mortgage interest on your primary residence, as well as on a second residence. (There are limits, but relatively few taxpayers are affected.)
The interest on up to $100,000 borrowed on a home equity loan or home equity line of credit, regardless of the reason for the loan.
Points that you paid when you purchased the house (or those that you convinced the seller to pay for you).

• How much can I save?

The actual amount of money you save on your annual income tax bill depends on a variety of factors:
Your filing status (single, head of household, married filing jointly, married filing separately)
Your standard deduction amount
Your other itemized deductions
Your taxable income

Your home-related itemized deductions, plus your other itemized deductions must add up to more than the standard deduction or they won't save you any money.

• What can't I deduct?

You can't deduct the following payments for a personal residence:
Dues to a homeowners association
Insurance on your home
Appraisal fees for your home
The cost of improvements to your home, except in the relatively rare case where they qualify as a medical expense. (But keep those receipts. They may help reduce your taxes when you sell your home.

• Appreciation

appreciation is the increase in market value of the asset over time, realized as a cash flow when the property is sold. Capital appreciation can be very unpredictable unless it is part of a development and improvement strategy. Purchase of a property for which the majority of the projected cash flows are expected from capital appreciation (prices going up) rather than other sources is considered speculation rather than investment.

• Borrowing power

What if, having gone through the prequalification process, you are dissatisfied with the mortgage amount you will qualify for? Perhaps you can see that your house-buying options will be fairly limited. You may need to lower your sights and simply recognize that you'll have to buy a less expensive starter home. But before you reach that conclusion, consider ways to increase your borrowing power

Unless you have sufficient funds to make a 20 percent down payment, your loan will almost always require mortgage insurance. Mortgage insurance helps protect the lender if the buyer fails to repay a loan. Loans that are insured by the government or a private mortgage insurer enable the homebuyer to purchase a home with a lower down payment than would otherwise be acceptable to the lender. Mortgage insurance on government loans is known as Mortgage Insurance Premium (MIP); the term Private Mortgage Insurance (PMI) is used for all other loans. 

We have already mentioned that with PMI, lenders will reduce the down payment requirement from 20 percent of the purchase price to as low as 3 percent. On a $100,000 home, instead of putting down $20,000, you might be able to make a down payment as low as $3,000! The PMI cost will be added to your monthly mortgage payments and your closing costs.

Government-insured loans
Mortgage insurance also is available through three federal government programs: the Federal Housing Administration (FHA) mortgage insurance program operated by the U.S. Department of Housing and Urban Development (HUD), the Department of Veterans Affairs' (VA) loan guarantee program, and the Rural Housing Service (RHS) loan program. To obtain any of these loans, you apply through a lender approved to handle them. 

• Stability

Owning your own home may be a great way to create equity for the future and provide stability and security for you and your family (provided you stay in it for a number of years and home prices remain relatively stable).
Overall, buying a home can be a good investment but you need to remember you will become your own landlord. You are now responsible for the maintenance and upkeep of your home and property. This also means that.

• Equity
  Home equity is the market value of a homeowner's unencumbered interest in their real property—that is, the difference between the home's fair market value and the outstanding balance of all lienson the property. The property's equity increases as the debtor makes payments against the mortgage balance, and/or as the property value appreciates. In economics, home equity is sometimes called real property value.

 

Homeowners acquire equity in their home from two sources. They purchase equity with their down payment, and the principal portion of any payments they make against their mortgage. They also benefit from a gain in equity when the value of the property increases. Investors typically look to purchase properties that will grow in value, causing the equity in the property to increase, thus providing a return on their investment when the property is sold.

                                You’ll have a place that is uniquely “yours” that you can customize

                     Fill your home with  colors of love