Tag Archives: home financing

Renting v. Buying a Home

Purchasing a Home

Jumping into the ring of homeownership is an exciting milestone! There are many ways owning a home can impact you and your family. How do you know when to rent and when to make the move to purchasing your home? Raccoon Valley Bank is here to help with our handy guide to the pros and cons of renting or owning a home.

 

Renting

Cons:

  1. No wealth creation. As your payments go directly to your landlord and not the specific property, you are unable to build equity and reap the return on investments from the home’s growing value.
  2. No tax benefits. While homeowners can deduct property taxes and mortgage interest payments from their federal income tax, renters can’t claim deductions for housing costs.
  3. Dependent on the landlord. For everything ranging from utilities, to paint, to the rent dollars themselves, your landlord makes the majority of the decisions when it comes to renting a home. Depending on your lease, your landlord can increase the rent increase each year, or month!

Pros:

  1. Accommodates flexible lifestyles. If you travel frequently for work, leisure, or medical care, you may not have the time or availability to take care of a home. Renting allows an affordable accommodation without any hassle of renovations or repairs.
  2. Freedom in allocating finances. For renters, expenses such as mortgage insurance, real estate taxes, and home maintenance costs, can instead be funneled into savings, stocks or discretionary funds after the monthly rent and utilities are paid.
  3. Reduced insurance costs. Apart from renters insurance that covers the interior of a home, costly homeowners insurance and unexpected repairs belongs to the landlord, not the tenant.

Buying

Cons:

  1. Unexpected costs. Leaky roofs, backed-up pipes, and cracking foundations create thousands of dollars worth of unplanned repairs that stretch your budget to accommodate.
  2. You’re locked in. Once you sign on the dotted line the house is yours, and so are the payments.
  3. Fluctuating home value. Despite your best efforts, your home can become less marketable based on circumstances out of your control. A declining neighborhood, housing surplus, or unstable market can decrease the value of your home despite well done renovations.

Pros:

  1. Fixed monthly payments. Homeowners with fixed-rate mortgages can trust that their mortgage payment will stay consistent each month, enabling the creation of a stable monthly budget.
  2. Financial gains. From tax credits to equity building, home ownership offers buyers a number of monetary perks and freedoms they wouldn’t receive as tenants.
  3. Freedom in expression. A kitchen remodel, a four-season porch addition, and other decorative transformations are all up to a homeowner’s discretion with no strings attached to a lease agreement.

Still on the fence? Our experts at Raccoon Valley Bank can sit down with you to help make a guided decision that suits both your lifestyle and your financials. Call and set up an appointment with us today!

The Journey to Home Ownership

Home Equity Line of Credit

The journey to becoming a first time owner is an exciting and personal process. With questions ranging from price, commodities, to neighborhoods and more, the task of finding your ideal property can seem daunting as you begin the search. At Raccoon Valley Bank we want to help you make the most of your home buying experience with our guided route to home ownership. Sit back, relax, and enjoy the view as we take you step by step through the first time home buying process.

  1. Assess your personal finances. Take a good hard look at your current sources of income, in addition to the underlying expenses you have each month. Determine if your funds can support the cost of a monthly mortgage, property taxes, home insurance, and all the other associated costs of home ownership.
  2. Mortgage Pre-Approval. Once you’ve decided to make the jump into home ownership it’s time to determine what your ideal purchase price will look like. Work with your mortgage lender to decide on the best price range for you and your family. After determining your financing needs together, the bank will evaluate your credit history award you with a pre-approval letter for the amount they will agree to finance.
  3. Find “The House.” Here comes the fun part – house hunting! Pair up with a reputable realtor from the area to look at houses that do not exceed the approved purchase price. You may look at six homes, or thirteen, but once you find the right property you’ll know it’s the one!
  4. Get an approved offer. After touring the property and checking for any major repairs, speak with your realtor about putting in an offer on the house at price within your budget. The seller may counter with a different price point, and negotiations for the offer can be discussed with your realtor. When you and the seller have agreed to a purchase price and a finalized offer is signed you officially have an accepted offer to purchase your future home!
  5. Speak with your mortgage lender. Now that you’ve found your new place, your mortgage lender can gather accurate tax information and further specifics for your mortgage financing. Reach out to confirm the terms of the loan prior to closing to help ensure a smooth transition.
  6. Home Inspection. Since you and the buyer now have an accepted agreement it’s time to fully inspect the property you intent on buying. Speak with your realtor for recommended home inspectors in the area, and set up a time when both you and the realtor can be present. The home inspector will detail notes about the property concerning safety hazards and other important repairs that be taken care of at the sellers expense.
  7. Additional Negotiations as Needed. Once the home inspection is complete speak to your realtor to negotiate any changes within the accepted offer.
  8. Close the offer. After all the paperwork is finalized, and you complete the final walk through of the home, it’s finally time receive your mortgage financing and close the home offer.
  9. The House is yours. All your hard work has paid off and you are now a home owner! Celebrate this monumental achievement by inviting family and friends over for a moving or house warming party!

Whether you’re looking for a peaceful cottage in the country, new construction in the city, or a happy hideaway in the suburbs, Raccoon Valley Bank can help you with all your financing needs. Stop by the bank or give us a call at (515) 993-4581 and get started on your home buying journey today!

Spotlight Feature: Mortgage & Consumer Loans

Consumer Loan

From new homes, vehicles, construction, and everything in between Raccoon Valley Bank is here to help! We recognize the importance of owning your own home or purchasing your first vehicle. With such large milestones of accomplishment, we want to assist you in crossing your t’s and dotting your i’s, so that when you get your new purchase it’s everything you hoped for!

 

Mortgages

Purchasing your own home is still very much a part of the “American Dream,” and Raccoon Valley Bank helps make home ownership possible. By offering fixed-rate mortgages, adjustable-rate mortgages and mortgage refinancing options, Raccoon Valley Bank can help you find the ideal mortgage solution. Visit the Mortgage Center for more information and to apply for a mortgage today!

 

Types of Mortgages

FHA – Most commonly used among new homeowners this loan option requires a smaller down payment and offers payment flexibility to fit your current income.

 

USDA – Typically used in more rural areas, the USDA loans are a great option if you’re looking to live in the countryside, or are repairing an older home.

 

VA – If you’ve served in the military, active or reserve, this a great option for you! With low down payments and terms built for veterans, these loans can be great for a first-time home buyer.

 

Traditional – This is our most common mortgage option which comes in 5, 15, and 30 year terms. Be sure to check our rate watch to find the best time for your next mortgage financing.

 

Consumer Loans

Whether you are trying to meet a personal financial goal, become more independent or are met with unplanned costs, there are times where you need additional funding, and Raccoon Valley Bank is here to help!

 

Auto – Finance your new car, truck, mortorcycle or other motorized vehicle with our helpful lending offerings.

 

Personal –Whether you’re looking to finally get that lake boat, or an RV to travel the country in, we have specified financing options for every situation.

 

Home Equity Line of Credit – Finally complete that home renovation or addition! Try using this type of lending option when your budget is a more of a ballpark figure, but not necessarily an exact number.

 

With lending capabilities for nearly any project, Raccoon Valley Bank is your trusted lender for all things financial. Stop by our nearest location today, and share with us your next purchase, we’ll help get you started!