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WHAT ARE THE BEST SOURCES OF CASH FOR A DOWN PAYMENT?
If your own bank account isn't large enough, you have several options. For example:
Receive a tax-free gift ftom your parents, or relatives documented by a "gift letter" stating no repayment is required (thus your debt burden in not increased). Some lenders require you to use some of your own money in addition to the gift.
* Borrow against a life insurance policy.
* Borrow against a company pension plan.
* Cash in a retirement savings plan (even though you may have to pay a penalty for early withdrawal).
* Ask for a cash payment from your employer instead of next years raises.
* Obtain an advance on a future inheritance.
* Use your own business as collateral.
* Team up with freinds, relatives or investors as partners in return for equity in your home. (You can, if you like, buy them out later.)
WHAT TO BRING TO A LOAN APPLICATION
Legal Description of property
Contract to purchase property
Address of Employers
Previous landlord's name and address (if you have lived there less than 24 months)
Previous employer's name and address (if you have been employed by present employer for less than two years)
All checking account numbers
All savings account numbers
All money markets account numbers
Most recent brokerage house statement of investments
Loan numbers for all loans — bring name and addresses of lenders
Monthly payments & balances on all loans
Credit card account numbers, balance, and monthly payment
Monthly payments on real estate debt
Monthly income on investment property
Copy of divorce/seperation papers (if applicable)
Two years P & L if self-employed
Year-to-date P & L if self-employed
Two years' tax returns if self-employed or if 5% or more of you income is derived from investments
W-2 and current pay stub
W-2 and current pay stub if self-employed
***Please note that if you have accounts or loans from out of state depositories and businesses, please be sure to provide names, addresses and zip codes.
WHAT ARE SOME OF THE TAX ADVANTAGES OF OWNING A HOME?
Tax breaks enter the home ownership picture from all angles: buying, owning and selling. Remember, tax laws are constantly changing and complex, and you should consult with your professional tax advisor before filing any claims on your tax returns. Here are the basics as of June, 26, 2002.
HOME BUYING
Tax-savings begin with deductibles allowed for:
Settlement charges for the use of money, such as "points."
Prepaid interest on prorated loan payments made between closing and your first mortgage payment.
City, Township and/or County real estate taxes on the purchased property.
WHAT DO PEOPLE MEAN WHEN THEY SAY HOME OWNERSHIP IS THE KEY TO FINANCIAL SECURITY?
The benefits of home ownership are both financial and psychological:
Home ownership is a durable (real) investment. Historically, housing has appreciated in value for decades. Although no one can say a specific home in a specific location will increase in value, generally speaking the odds favor most homeowners. Also, monthly mortgage payments (the part that reduces the prncipal loan balance) becomes a solid form of savings.
Numerous unique tax advantages are available to homeowners. Unlike other investment tax shelters, home ownership works for you even as you live in your investment. For example, the thousands of dollars you pay in mortage interest is deductible. This tax deduction alone can sometimes make owning your own home cheaper than renting with "after-tax" take-home dollars.
By accumulating equity in your home you can later "move up" to another home, with a good down payment on hand.
Home ownership offers you the opportunity to take control of your housing costs. Mortgage payments (even on adjustable-rate mortgages) are more predictable than rents.
Owning your own home allows great freedom of choice in choosing community, architecture, interior decor, appliance selection, plus whatever method of financing best suits your situation