Today’s guest post is by Eileen McAuslan, a friend of mine who is a Realtor here in Chicago. Eileen takes her career way beyond just showing properties. She explains the math, money, and market trends behind making that huge and scary home purchase, which is part of why I think she is fabulous! In this post, Eileen gives hopes to those of us who would like to buy our first home.
By, Eileen McAuslan
In addition to your resolution to get fit & eat healthier, if you don’t own your own home, why not add “save for a down payment” to your list of resolutions? Once you hear what I have to say, it might be a resolution that you actually keep! A smart, sexy, & savvy career girl should also know that there are many benefits to buying a home this year:
The IRS is offering up to a $7500 refundable tax credit for first time home buyers. You repay this as an interest-free loan over the course of 15 years and don’t have to repay it if you don’t sell the home for a profit! This is only good for home purchases through July 2009, though, so time is ticking! Click here for more info on this program.
If you qualify for an FHA loan, you only need a 3.5% down payment and interest rates are STILL LOW.
In many areas, median home prices are hovering around 2002 prices. 2002! That’s like zapping back in time to buy your home!
Prices have fallen but the supply is still out there! You’ll have plenty of places to look at and you can take your pick of the litter!
Now, I know, the big question on your mind is – how much is it going to cost me monthly when I own a home? Isn’t it cheaper to rent? Here is my answer based on the Lakeview area of Chicago – the area I am most familiar with but also a more expensive area than most non-metropolitan areas.
Here, you can buy a 1 bedroom condo for $200,000 or less.
Let’s say you get a 30 year fixed FHA loan at 6% on a $175,000 condo (you get a slightly higher interest rate for a FHA loan which allows for a lower down payment). You put down 3.5% or $6,125.
The monthly mortgage payment on your new condo including PMI will be roughly $1000.
Now, for the “extras”:
The monthly assessments are $150 and cover exterior maintenance, water/waste, lawn care, and common insurance.
Property taxes will be about $2500 this year.
Condo insurance will be about $300 a year.
All of this will cost you under $1500/month!
For someone outside of Chicago, that might sound pricey, but keep in mind that 1BR condos easily rent for $1500 or more in this area. And don’t forget, when you are paying down a mortgage, you are building equity – which you are definitely NOT doing when you rent.
This is just the beginning of all of the information there is to know about buying a home… attend my home buyer info session or contact me for more!
Tues Jan 27 at 6pm
1840 N Clark St. in Chicago
RSVP to the info session or contact me anytime at firstname.lastname@example.org.