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Is Home Ownership for You?

Additional Costs to home ownership

Initial fees to be paid upon purchase are:

1. Legal fees2. Survey certificate3. Mortgage application4. Cost of appraisal5. Cost of appliances new or used6. Property tax and water & sewage adjustments7. Window coverings

8. Moving expenses9. Hook-up fees for cable, telephone and power10. Miscellaneous (lawnmower, shovels, rakes, paint & painting supplies,

ladders, tools, etc...)

And once the home is purchased, the monthly expenses attributed to owning theproperty start. You will start to pay things like:

Civic Water & Sewer Property Taxes and Insurance. the property must be maintained! Lawn mowing fall cleanup snow removal

These are all chores that need to be done around the home and in many cases someexpensive equipment may need to be purchased to do this maintenance. Then there'sthe maintenance that the house itself needs too!

Either way, if the homeowner does these task themselves to save money but winds upwith less free time; or pays someone else to do it for them, these are all costs thatshould be examined prior to buying.

Types of Places You Can Live

In today's world, there are many kinds of places to live.

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Single-family homes . These come in all sizes, and styles; they may be built on verylarge or very small pieces of land (lots); and they may be located in many different typesof neighborhoods.

Multiple family homes . These include apartments, duplexes, and town homes

Apartments , too, come in a variety of styles and sizes. Some are in high-rise buildings,others are in smaller buildings with only a few units; some may be in a huge complex(many apartment buildings clustered together), others may be in a single building;apartments may be located in an area that also features other residential properties, ornear a commercial center.

Townhouses/duplexes. These are housing units, in which at least two units areattached, sharing a common wall. Townhouses often come in clusters of 4-8 units in onestructure; duplexes are just two units.

Mobile/modular homes . Few "mobile homes" today are actually mobile. Most of theseunits are set on some type of foundation or footing (pad) in a mobile-home park andare never moved. Some of these homes are quite spacious, but construction is generallyless sturdy than in a traditional home. However, they offer a relatively low-price optionfor someone who wants to own a home.

What Do You Want?

Let's take a look at your housing needs. Use this checklist to help determine what kindof housing you should consider.

Space needs:

How many bedrooms do you need? How many bathrooms? Special purpose rooms desired: Recreation/TV Office/study

Sewing/crafts/hobby room How much storage space/closet space? Do you need A garage/carport? Parking space(s)? Room for pets? Space for gardening/flowers?

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Room for play/children? Other outdoors space?

Factors for selecting a home:

There are other factors to consider in deciding what type of housing you want.

length of time you will live there access to schools/daycareFuture housing needs--parents, children, etc. location - neighborhood, city, etc.distance to work fire & police protectionmedical facilities shopping & recreational facilitiesplaces of worship city services

construction of housing new/older home

Advantages of Owning a Home

If you are thinking about buying a house, consider the following advantages:

1. A house is a form of forced savings (you make payments on an asset that maygrow in value--many families would never accumulate assets otherwise).

2. Homeowners often have a sense of pride and status in home and community.3. A homeowner may have a better credit rating (equity in a home improves the

credit status of the family and can be used as collateral for an emergency loan).4. Mortgage payments contribute to an investment, particularly if the property is

located where it increases in value over a period of years.5. Monthly payments remain relatively constant for many years (fixed loan), thus

housing costs are stabilized because present and future costs can be estimatedand planned.

6. Interest on mortgage monies and taxes are legitimate income tax deductions.7. The house may increase in value, resulting in a significant gain in net worth.8. Ownership may contribute to security, especially in retirement years when income

normally decreases.9. A homeowner can borrow against his/her equity, as the value of the house

increases against what is owed on it.10. More space may be available for family members and their activities.

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11. A homeowner has freedom to make improvements and changes to the houseand surroundings as desired (although a development or association may haverestrictions and prohibitions).

12. Home ownership can contribute to the general well-being and sense of "roots" ofthe family, especially for children.

13. Homeowners generally are concerned about community affairs and how theymay affect their property.

Disadvantages of Owning a Home

The disadvantages of home ownership may outweigh the advantages for some peoplebecause:

14. A substantial down payment is needed.

15.

A house requires a big commitment in time, emotions, and money.16. The house may decrease in value if the neighborhood deteriorates or changesquickly; thus resale may be a problem.

17. The homeowner may have limited money for other purchases or activities sincehis or her money is tied up in the house.

18. Maintenance and repairs may be costly and take a great deal of time and effort.19. Owning a house requires money for insurance, and a loss of the house as a result

of a natural disaster (tornado, flood, hurricane) could mean a serious financialburden.

20. Some families have difficulty budgeting for maintenance, repairs, homeimprovements, and/or home ownership dues.

21. Real property taxes could increase dramatically.22. Total housing costs may take too much of the budget, resulting in potential cash

flow problems.23. The family may have higher moving-in costs as new items may have to be

purchased for a house.24. The family may feel less secure if neighbors are not near.25. The house may be too large after children leave home.26. Security may be a problem if you travel a lot.27. Unexpected loss of income due to job termination or unemployment may limit

money available for home ownership costs.